Here Are Answers To Some Bankruptcy FAQs

Listed below is some of the most common bankruptcy FAQs (Frequently Asked Questions.) For more specific information regarding your individual bankruptcy, please consult with your attorney.

What types of bankruptcy are there

Almost everyone asks this common bankruptcy FAQ. There are two main forms of bankruptcy under federal law. Chapter 7 bankruptcies are a liquidation of a debtor's assets. By filing bankruptcy, the debtor turns over all non-exempt property to the Trustee. He then converts as much of it as possible to cash pay off a portion of what the creditors are owed. Chapter 13 bankruptcies are a reorganization of a debtor's debts. The bankruptcy court reorganizes their debt in such as way so that they can pay off their debts in three to five years.

Will filing bankruptcy stop the endless telephone calls?

This FAQ can be one of the more pleasurable aspects of filing bankruptcy. Once you file in bankruptcy court, the law is in charge! Any attempt by your creditors to obtain payment must cease. The best thing to do is call all your creditors yourself and tell them you have filed bankruptcy. Give them your case number and attorney's name. The snarls will magically turn to smiles. Get a phone and a cup of coffee, and then have a ball!

Does anyone else have to know?

Those concerned frequently ask this question about their job and social standing. Any court action is a matter of public record. Federal law prohibits you from being fired because of your filing bankruptcy. Credit reporting bureaus will report your bankruptcy for up to ten years. But as far as your friends knowing, they will have to do some digging. You never know; you might see them in bankruptcy with you!

Will I ever be able to own a home again?

Many people ask this FAQ. Bankruptcy is a scary word, especially when it happens to you. Yes, bankruptcy is considered a positive in many ways to a bank. You have a fresh start and in two years after the bankruptcy discharges, you can be eligible for a mortgage loan. A good down payment and income stability are more important factors to a bank than filing bankruptcy in the past.