What is bankruptcy?
Bankruptcy is a legal proceeding that allows an individual (or company) to eliminate debt and to stop creditors from pursuing them.
Does filing for bankruptcy affect my credit?
Yup. While filing for bankruptcy does affect your credit, depending on what chapter of bankruptcy you file, it will only stay on your credit for a certain amount of time.
Will I ever qualify for a mortgage after filing for bankruptcy?
Yes. Many people qualify for loans and purchase homes after a bankruptcy filing. How quickly you are able to purchase a home and qualify for a loan is up to the discretion of the lender. There are different loan programs that have different waiting periods (and rebuilding your credit). The waiting period after a Chapter 7 would be 2-3 years depending on the financing type. Whereas the Chapter 13 could be up to 4 years or as soon as 1 year (and while you’re still active in the bankruptcy) with a judge's approval.
Do I have to go and see a judge when I file for bankruptcy?
After filing for bankruptcy, a debtor’s contact with the court is very limited if you’ve filed with an attorney. There is a required meeting of creditors, where the trustee assigned to your case conducts a quick meeting to ask you questions
When will all of my debts go away?
A debtor officially is discharged from their obligation to the debt once the discharge order is signed by the judge. Keep in mind what debts are included in the Bankruptcy.
Filing for Bankruptcy is a very personal decision and at times a business decision. Please do not enter into this lightly. The effects of this decision could last for years. Talk with your creditors, a financial planner and even an attorney to make sure that you are making an educated decision.