Tollefsen Law PLLC provides bankruptcy services primarily to businesses and business owners. Many of the same questions apply to consumer as well as business bankruptcies. This bankruptcy FAQ list was generated by our client’s questions.
Table of Contents
- Frequently Asked Questions about Bankruptcy
- How long does a bankruptcy remain on my credit report?
- What property may I keep after file for bankruptcy?
- Can I continue making monthly payments on assets like a house or vehicle after I file for bankruptcy and keep them?
- How difficult is it to re-establish credit after receiving a bankruptcy discharge?
- What’s the difference between a secured debt and an unsecured debt?
- Why does TL charge for initial consultations?
Frequently Asked Questions about Bankruptcy
How long does a bankruptcy remain on my credit report?
The fact that an individual filed a bankruptcy can remain on the credit report no longer than 10 years under provisions of the Fair Credit Reporting Act. If a chapter 13 bankruptcy is successfully completed, the credit reporting industry retains the information for seven years rather than the ten years allowed by law.
What property may I keep after file for bankruptcy?
You are allowed to keep certain property under the provisions of federal and state law exemptions to protect your property in bankruptcy. Most people do not exceed these exemptions and do not lose any of their property. Those who own property worth more than available exemptions should consider a Chapter 13 bankruptcy. Businesses that have ongoing businesses can protect their assets in Chapter 13 (asset value limitation) or Chapter 11.
Can I continue making monthly payments on assets like a house or vehicle after I file for bankruptcy and keep them?
Yes – As long as you catch up the arrearages and stay current. If you cannot immediately make your accounts current, Chapter 13 may be the solution. A Chapter 13 bankruptcy will allow you to keep the property if you make all future monthly payments and pay a little extra each month to cure your arrearage.
How difficult is it to re-establish credit after receiving a bankruptcy discharge?
Generally within two years of obtaining a discharge, you will have credit cards and be able to finance a car. Chapter 13 debtors are often able to finance the purchase of a vehicle and refinance their homes while in Chapter 13 bankruptcy. It is easier to re-establish credit after bankruptcy than many would suspect.
What’s the difference between a secured debt and an unsecured debt?
A secured debt is a loan backed by an asset like a mortgage on a house or a security interest on an auto. The creditor has the right to take back the security if the debtor fails to make a required payment. An unsecured debt is a loan not backed by an asset like utility bills and credit cards. An unsecured creditor does not have the right to take repossess property if you fail to make a payment. The creditor can bring an action to obtain a judgment against you. Security interests are generally not removed from property in bankruptcy and the creditor is entitled to payment or the asset. If the asset is worth less than the debt, the excess obligation can be discharged. If the asset is returned, a debtor’s obligation can be discharged.
Why does TL charge for initial consultations?
Due to the volume of request, free consultations are not practicable. In addition, we have learned that prospective clients who are serious about solving their legal problems are willing to pay for the legal services they need. We need to check the background of the new client, check for conflicts, obtain a signed fee agreement, and open the file. We charge a minimum fee of $500 which will apply to any bankruptcy petition filed by the client within 3 months of opening the file.