Bankruptcy faq
FREQUENTLY ASKED QUESTIONS
Bankruptcy is a legal process that helps individuals or businesses eliminate or repay debts under the protection of the court. It provides financial relief but also comes with long-term credit consequences.
- Chapter 7: A liquidation bankruptcy that eliminates most unsecured debts.
- Chapter 13: A reorganization bankruptcy that allows debt repayment over 3–5 years.
Not all debts are dischargeable. While bankruptcy can eliminate credit card debt, medical bills, and personal loans, it does not erase student loans, child support, tax debts, or alimony in most cases.
- Chapter 7: You may have to surrender non-exempt assets, but exemptions can help protect certain property.
- Chapter 13: You can keep your assets if you stick to your court-approved repayment plan.
If you have overwhelming debt, constant collection calls, or the threat of foreclosure, bankruptcy may be an option. Consider consulting a bankruptcy attorney to review your situation.
- Chapter 7: Up to 10 years
- Chapter 13: Up to 7 years
Yes! You can start rebuilding credit by making on-time payments, using secured credit cards, and keeping credit balances low. Many people qualify for new loans and credit within 1–3 years post-bankruptcy.
While you can file on your own, a bankruptcy attorney helps ensure that paperwork is correctly filed, protects your rights, and maximizes your financial relief. An attorney can also help prevent mistakes that could cause delays or case dismissals.
Yes, but lenders typically require a waiting period before approving a home loan. Working on credit repair, saving for a down payment, and maintaining stable employment can improve your chances.
Yes! Once you file for bankruptcy, an automatic stay is issued, legally preventing creditors from contacting you, filing lawsuits, or pursuing wage garnishments.
