Many people assume that they will never face bankruptcy. When it becomes a possibility, they realize there are many things they do not understand about how it works or how it will affect their future. Czachor, Polack + Borchardt, L.L.P., works hard to dispel bankruptcy myths for people who have questions about the process.
Some of the most common questions we receive include:
Will I lose everything?
No. The bankruptcy code allows exemptions, which protect certain property. Most cases are “no-asset” cases, meaning the debtor is allowed to keep all his or her property. A skilled bankruptcy attorney can help you apply all exemptions to retain the maximum amount of your property through bankruptcy.
Will bankruptcy ruin my credit?
No. In most cases, bankruptcy helps to repair your credit by eliminating debt and delinquent payment history. The bankruptcy typically shows up on your credit report for seven years, but in many cases, your credit scores begin to improve in 12 to 18 months after filing.
Also, credit card companies often extend credit again after the bankruptcy, knowing that you cannot file for several years. Used responsibly these cards can help you rebuild your credit as you make routine payments.
Will my bankruptcy be published in the paper?
No. The bankruptcy is technically public record, but only those with access to the federal courts see it, including attorneys, lending agencies, or other professionals.
Will I be fired from my job if I file for bankruptcy?
No. The bankruptcy code strictly prohibits employers or companies from firing employees because they filed for bankruptcy.
Does filing for bankruptcy make me a bad person, discharging all that debt?
No. Bankruptcy happens to good people for a wide range of reasons, including medical bills, accidents, and financial hardship. This process is specifically designed to give individuals and families a fresh financial start following hardship.
Also, companies account for a certain amount of payments that they will not receive. You are not personally hurting these companies by discharging debt.
After bankruptcy, will I ever be able to purchase a home?
Yes. By wiping bad credit history in bankruptcy and beginning to rebuild your credit immediately after filing, you put yourself in a better position than before to buy a home. Most people are able to obtain mortgage loans within three to seven years of bankruptcy.
If I have filed in the past, can I file again?
Yes. You may file for Chapter 7 bankruptcy after eight years. The time allowed between Chapter 7 and Chapter 13 bankruptcy is shorter. We can help you determine if you are eligible to file for bankruptcy if you have filed a prior case.
Can I file for bankruptcy if I am not a U.S. citizen?
Yes. The bankruptcy code only requires that you be a resident and have a social security number or tax identification number.
Are taxes dischargeable in bankruptcy?
Yes. This is dependent on the type of taxes that you owe and in which years the taxes were assessed. Often, though, they are at least in part dischargeable. We will take a careful look at your taxes and determine which may be discharged in bankruptcy.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.