Frequently Asked Questions
If I file for bankruptcy, will my credit score be ruined? Will I never have good credit again?
No. Even though a bankruptcy case may appear on your credit report for 10 years after you file, bankruptcy wipes out your old debts. You are likely to be in a better position to pay your current bills, and you may be able to get new credit. Your debts will be discharged in your bankruptcy and should be listed on your credit report as having a zero balance. This means that with careful financial planning after their bankruptcy case is completed, most of our clients' credit scores actually improve after bankruptcy.
What will happen to my home and car if I file for bankruptcy?
In most cases, you will not lose your home or car during your bankruptcy case, as long as your equity in the property is fully exempt, under either the Texas or Federal exemptions. Furthermore, a Chapter 13 can be used in some cases to assist a debtor in keeping their home or car if they are behind on payments.
Will I have to go to court?
In most bankruptcy cases, you only have to go to the meeting of creditors, also known as the Section 341 meeting. At the meeting, you will meet with the bankruptcy trustee and any creditor who chooses to come. This is usually a short and simple proceeding, and you only have to answer a few questions about your bankruptcy paperwork. However, in more complicated cases, you may have to appear at a hearing. In a Chapter 13 case, you may also have to appear at a hearing for the judge to approve your plan.
When will my creditors stop calling?
As soon as you file your petition, the automatic stay will legally protect you. This means that the automatic stay will prevent your creditors from calling or writing you.
What debts may be discharged?
Almost all of your unsecured debt is discharged, including:
- Credit cards
- Medical bills
- Some judgments
- Repossession debt
- Mortgage deficiency
- Eviction or broken lease debt
- Past-due utilities
- Some taxes
Which debts may not be discharged?
- Money owed for child support or spousal support
- Most criminal fines
- Some taxes
- Student loans (unless you can prove to the court that repaying them will be an “undue hardship”)
- Loans you received by knowingly giving false information to a creditor
- Debts resulting from “willful and malicious” harm
- Debts incurred by driving while intoxicated
Do laws passed in 2005 make it impossible for me to file?
While the bankruptcy law passed by Congress in 2005 changed the process and made it more complicated, the basic rights to file bankruptcy and most of the benefits of bankruptcy remain the same for most individuals.