BANKRUPTCY FAQS

There are several options when it comes to what happens with your vehicle when you file for bankruptcy. You can give up ownership of your vehicle to your creditors, you can continue to pay your loan at the current payment, or you can restructure the loan to get a lower monthly payment.

Filing for bankruptcy will cause your credit score to drop. However, that change will not last forever if you practice good financial habits and work to rebuild your credit score. The bankruptcy will not stay on your record forever either. Chapter 13 will be on your record for 7 years and Chapter 7 will stay on your record for 10 years.

Yes, when you file for bankruptcy, there is an automatic stay against any creditors contacting you about payment. This is one of the benefits of filing for bankruptcy.

When you file for bankruptcy, there are assets that are designated exempt assets. These include your home and vehicle. That means you will not lose your home or vehicle if an agreement can be reached for a new payment plan for your mortgage or if you pay for your non-exempt equity in the home.

To qualify for Chapter 7 bankruptcy, you must be an individual, partnership, corporation, or any other business entity. You must also qualify under the means test which is a test that determines if your monthly income is above or below the state’s median monthly income.

Most people who file for bankruptcy never set foot in a courtroom or see a judge. In most cases, you will only go to the courthouse to file your bankruptcy papers, but sometimes even your attorney can do this for you. You will have to attend a meeting with your creditors, but that will not be in court either.