Filing for bankruptcy or getting into debt trouble is overwhelming and daunting. It is my goal to relieve your stress and help you through the process. I keep clients educated and communicate to them throughout the entire process. I provide a non judgmental environment and aim to help clients understand their financial problems and exercise their rights under the U.S. Bankruptcy Code.
Below I have singled out 5 of the most popular questions that are asked when people schedule their initial consultations. I have provided some short answers here, but would welcome you to contact me for further information and discussion if you are curious as to whether filing for bankruptcy is right for you.
Will a BK stay on my record for 7 years?
Yes, it says on your record. However within one year, your credit score can and will be back to 700 or higher. You need to sign up for credit card offers as soon as your discharge becomes finalized and start using them and pay them in full every month.
What will happen to my car in a bankruptcy?
This is a question I receive time and time again. I try to make it clear to clients, so no mistake is made along the process. Continue making timely payments if you want to keep the car during bankruptcy. Cars are considered secured debt which means they are different than credit cards (which are unsecured debt). You CANNOT get your vehicle balance discharged AND keep your car at the same time. If you are behind on your payments, the bankruptcy stops repossession temporarily. Once the bankruptcy is complete, you will need to decide whether you want to keep the car or not. The vehicle finance company will most likely not accept online payments, so be prepared to send in payment another way. Do NOT sign a reaffirmation agreement unless you are behind in your payments. If you do sign one, know that in the future you would not be able to walk away from your car. For more info, read my blog on cars and bankruptcy.
Is the Meeting of Creditors or Trustees meeting scary?
Many people want to know if their creditors actually show up to this meeting. No, your creditors do not show up. A Trustee is assigned to your case and they place you under oath, confirm what is in your petition and ask you a few other questions about your income and assets. When it is all said and done, it is about 5-10 minutes long.
Should I keep making my credit card payments while I am preparing to file for bankruptcy?
No! Even if they start calling you, you must ignore them. You are throwing good money at a bad problem. You should save that money to pay your attorney fees or living expenses.
If my wages are being garnished, will the bankruptcy stop the garnishment?
Yes! This happens because bankruptcy’s automatic stay prohibits most creditors from continuing with collection actions during your bankruptcy case. When you file for Chapter 7 bankruptcy, the law immediately protects you from creditors through this automatic stay. There are a few exceptions with the most notable being child support payments.
What should I spend my tax refund on or savings on prior to filing for bankruptcy?
You should stock your pantry, get dental work done, necessary home repairs, purchase appliances that you may need, etc. Do not make frivolous purchases and focus on spending the money for the improvement of your families lives. If you have been putting off medical treatments like dental work or need repairs to your house that make your home habitable, then please spend the money on those.
Khan Law will work with you one-on-one to find the best available solution to your financial problems — whether the answer is pursuing bankruptcy, negotiating with creditors or undergoing credit counseling. I am proud to be both a legal counselor and dedicate advocate for my clients. Please click here to schedule a confidential and complimentary initial consultation if you have questions.