Frequently Asked Questions

Will I lose my house or car in bankruptcy?

You can keep your original loan with any mortgage or vehicle lender in a Chapter 7 case as long as you are not behind on payments. This is called reaffirming the debt. You must continue to make regular payments on this property. If you do not want to keep the original loan but still want to keep the property, then you have the option of redeeming the property. When you redeem, you must pay the full value of the property or use a redemption company to get a new loan.

According to Debt.org, 96% of Chapter 7 filings are “no asset” cases, meaning there is not enough value in the estate for the trustee to sell it and pay off creditors.

If you have non-exemptible assets or are behind on payments, filing a Chapter 13 case allows you time to repay debts while simultaneously reducing the amount paid to unsecured creditors.

What is an automatic stay?

Filing for bankruptcy protection grants an automatic stay which temporarily prevents creditors from harassing you about your debts and starting or continuing court proceedings such as foreclosure, eviction, repossessions, and garnishments.

How SUCCESSFUL is bankruptcy?

In 2020, 95% of Chapter 7 filings were successfully discharged according to the American Bankruptcy Institute.

What if I am married?

Your spouse does not need to file for bankruptcy just because you do. Even if you are married, you can still file for bankruptcy protection separately.

What about my credit score?

You can start rebuilding your credit score as soon as your bankruptcy is discharged or dismissed. Many individuals purchase new homes, and vehicles, and qualify for credit cards a few months after the bankruptcy case is concluded. With proper planning and counseling, you can get new credit much sooner than expected.

A report from the Federal Reserve Bank of Philadelphia showed that those who filed for Chapter 7 bankruptcy had an average credit score of 538 according to data from credit bureau Equifax. The average credit score jumped to 620 by the time those bankruptcies were finalized.

If you are worried about your credit score, the financial report we pull shows how filing for bankruptcy would affect your score.

How often can I file for bankruptcy?

You can file a second Chapter 7 in eight years. If you plan to file Chapter 13, you can file four years after Chapter 7.

You can file a second Chapter 13 in two years. If you plan to file Chapter 7, you can file six years after Chapter 13.