When you file for bankruptcy, the last thing you want to have in uncertainty about what’s going to happen. That’s why it’s so important to be informed and find the answers you need to answer your most pressing questions about bankruptcy. That way, you’re not faced with so much fear of the unknown that often comes with filing.
With that in mind, we’ve answered the most common questions people ask about bankruptcy that people ask. Learn what you need to know about the filing process and what happens before, during and after you file. If you still have more questions or need help with filing, call us at 1‐855-417-7188 to connect with the right services for your needs.
Need help starting the filing process? We’re here so you can get the fresh start you need.
Q:Can I file for bankruptcy to stop foreclosure?
This means you can use bankruptcy to buy more time to avoid foreclosure. In addition, your filing may cover your home. For example, if you file for Chapter 7 and your home is below a certain value, then it’s exempt from liquidation. Once you receive your final discharge, you can work with your lender to save your home.
Q:Can I file for bankruptcy without a lawyer
However, filing for bankruptcy on your own is almost never advisable. Filing for Chapter 7 requires a means test that you need to know how to navigate successfully. Even for Chapter 13, you must submit a repayment plan proposal to qualify. If you don’t submit it correctly, the court may reject your discharge request. And then even if you decide to use an attorney to file, the denial from your first filing may cause issues. In some cases, the court may not approve a proposal on a debt that’s already been denied once.
Q:Can I still get credit or loans after bankruptcy?
Secured credit cards are available to anyone in exchange for a small cash deposit. You can qualify for secured credit cards, regardless of your credit score or even if you finished a bankruptcy yesterday. There are also unsecured loans designed for people with bad credit. For example, credit building loans are designed for people with bad credit. You can get a small personal loan
Learn more about types of credit that can help you rebuild after bankruptcy »
Q:Does bankruptcy clear tax debt?
- Chapter 13 filings tend to be the easiest way to discharge tax debt through bankruptcy. Your IRS and state back taxes are simply rolled into your court-ordered repayment plan. You pay off a certain amount and the rest is discharged.
- Chapter 7 filings are a little more complicated when it comes to tax debt. You must meet at least five of six criteria in order to qualify for any discharge of your back taxes.
- It’s also important to note that bankruptcy discharge will not automatically eliminate a federal property tax lien. Even if you pay off the debt that originated the lien in full during your bankruptcy filing, you must still take steps after your filing to clear the lien
Understand the six criteria required for a Chapter 7 filing to clear tax debt »
Q:How does bankruptcy affect a cosigner?
If you are a cosigner of someone thinking about filing for bankruptcy, then Chapter 13 is usually the better option. The borrower can stipulate to the court trustee that they wish to repay the cosigned debt in full during their repayment plan. This will eliminate the debt, so you won’t be on the hook.
Get tips on how to talk to the primary borrower about their filing »
Q:How long does it take to file for bankruptcy?
Chapter 13 filings take longer because you must complete your court-ordered repayment plan. These plans generally take three to five years. Once you make the last required monthly payment, you will receive the final discharge.
Q:Is my 401k safe from bankruptcy?
“To do some homework on this before you talk to a local bankruptcy attorney,” Rhode says, “ask your employer if the 401(k) you are contributing to is an account qualified under the Employee Retirement Income Security Act (ERISA). These type of 401(k) accounts are excluded from your bankruptcy estate.”
Keep in mind, if you have taken money out of your 401(k), that money or asset is no longer protected. So, if you withdraw money from your 401(k) and then file for bankruptcy, those funds are not protected under ERISA.
Q:When can I file for bankruptcy again?
|First filing||Second filing||The time required between filings|
|Chapter 7||Chapter 7||8 years from the first filing date|
|Chapter 7||Chapter 13||4 years from the first filing date|
|Chapter 13||Chapter 13||2 years from the first filing date|
|Chapter 13||Chapter 7||6 years from the first filing date|
There is an exception on the last filing set listed above that may allow you to reduce the time before your Chapter 7 filing.
Start the filing process, so you can get the fresh start you need.
Article last modified on April 20, 2023. Published by Debt.com, LLC