Does Bankruptcy Devastate my credit?
Although the record of filing bankruptcy may technically stay on your credit for up to 10 years, often by making payments on time subsequent to your bankruptcy you can regain an "A" credit rating within 2 years of your discharge.
Ironically, in many cases filing bankruptcy may actually help your credit rating because discharging your debts greatly improves your debt to income ratio which is a major criteria creditors use in judging your "creditworthiness" (see below). In fact, many people report a flood of pre- approved credit cards within weeks of a bankruptcy discharge.
By all accounts, bankruptcy no longer has stigma attached to it that it once did. Perhaps, this is one of the reasons that the number of filings has been dramatically increasing over the last several years.
Can I keep any of my existing credit card accounts?
The credit card accounts that you have a zero balance on are not technically creditors and thus are not discharged in bankruptcy. Often these creditors will allow you to keep your credit with them.
If you do have an outstanding balance when you file, you may still be able to keep your account. To do this you usually must agree with the creditor to pay off the balance. Once you make an agreement with the creditor you must file the "reaffirmation agreement" and get the approval of the bankruptcy court. It is advisable to consult legal assistance before you reaffirm an otherwise dischargeable debt. Some creditors will allow you to get a new account with them by reapplying with them even though you discharged their debt in the bankruptcy.
Will everyone find out about my Filing?
Not unless you tell them or they go out of their way to check the public records. Bankruptcy filing are not normally published in newspapers, therefore the only people who usually find out that you are in a bankruptcy are creditors whose debts you have listed on the petition or who you apply for credit with.
Can I be fired for filing bankruptcy?
No, if your employer finds out about your bankruptcy, it is against federal law to discriminate against someone for filing bankruptcy.
What is the procedure after I file bankruptcy like?
In most cases, completing and filing your petition is the hardest part. If your bankruptcy petition does not raise any red flags for the trustee or your creditor(s), you're usually in good shape. Thirty to forty days after filing the petition, you are required to attend the "First Meeting of Creditors" or "Section 341(a) Examination."
At this meeting, creditors are given the opportunity to ask you questions. There is no judge for this hearing, just the Trustee in charge of your case. However, in most "no asset" cases, rarely do creditors show up for this hearing. Normally there is a room full of other filers and the questioning by the Trustee is very limited since they are usually pressed for time. 0ur kit gives you a list of the most likely questions that the Trustee or creditors will ask you so that you go in to court better prepared for the questioning.
In most cases, the key to the success of your case lies in your bankruptcy petition. Normally, 3-4 months from the time the petition is filed, you are granted final discharge of your debts.
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