What is bankruptcy? Bankruptcy is a federal legal proceeding designed to help individuals and corporations deal with debt problems. Individuals who do not have the current ability to pay their debts can file either a Chapter 7 or Chapter 13 bankruptcy. The filing of either of these bankruptcies stops all legal action of every type and nature by creditors who seek to collect their debts. Individuals or corporations that have very large debts can file Chapter 11 bankruptcies
What happens to my car in bankruptcy? If the individual who files a Chapter 7 bankruptcy seeks to keep their car a reaffirmation on the debt regarding the car can be filed with the court. This means that even though you’re filing bankruptcy, you’re going to continue to make the payments on your car to avoid it being repossessed.
Can bankruptcy be used to stop creditors’ harassment? Yes! When you file bankruptcy all creditors are legally required to cease and desist all actions against the debtor. They must cease phone calls, correspondence, and legal action of every type and nature.
How does bankruptcy affect foreclosure lawsuits? The filing of a bankruptcy results in stopping all foreclosure lawsuits. The Federal Court automatically gives the debtor a stay. The stay is a type of temporary injunction that stops all legal action by the debor’s creditors.
How long do Chapter 7 and Chapter 13 bankruptcies last? A Chapter 7 bankruptcy usually lasts between 4 and 6 months. Chapter 13 bankruptcies are usually designed to last between 3 an 5 years. This means a payment plan is made in the Chapter 13 bankruptcy and payments are made over either 3 years or 5 years to help the debtor become current on his or her debts.
Are bankruptcy filings public records? Yes. Bankruptcy filings are public records. However, the information about bankruptcy filings are usually maintained by credit bureaus. Generally speaking only individuals who have access to credit bureaus will learn about your bankruptcy filing.
Can I file a bankruptcy more than once? An individual who files a Chapter 7 bankruptcy must wait more than 8 years to be able to file a Chapter 7 bankruptcy again. A Chapter 13 bankruptcy can be filed a second time if 2 years have passed since you received the discharge in the first Chapter 13 bankruptcy filing.
Elliot S. Schlissel, Esq. has been practicing bankruptcy law for over 35 years. He is the managing partner of Schlissel DeCorpo LLP. The law firm represents debtors in foreclosure defense and helps debtors file bankruptcy cases and obtain mortgage modifications. They can be reached for a free consultation at 800-344-6431 or by e-mail at Elliot@sdnylaw.com.