Bankruptcy has the power to eliminate an overwhelming load of debt and offer you a fresh start that you may so desperately need. If you are considering filing for personal bankruptcy, this article will briefly educate you of certain aspects of the process to help you make an informed decision as to whether bankruptcy is right for you.
1. Credit History
Bankruptcy filings are public information, and are disclosed on an individual’s credit history. If you are considering filing for a Chapter 7 bankruptcy, keep in mind that the filing will remain on your credit report for ten years from the date you filed your petition. For example, if you filed on June 1, 2015, and your discharge was granted on September 10, 2015, record of your bankruptcy will be erased from your credit report on June 1, 2015. A chapter 13 Bankruptcy filing, on the other hand, will stay on your credit history for 7 years. Be sure to contact the three Credit Bureaus (Transunion, Expedia, Experian) as the duration may be shorter for each bureau.
2. Obtaining New Credit
Although obtaining new credit after bankruptcy may prove difficult, it is not impossible. Many debtors are able to obtain car loans and mortgages shortly after filing. These loans may come at high interest rates, but that’s the price you would pay anyway without filing for bankruptcy if you have not been paying your bills on time or not paying at all. In fact, your chances of obtaining credit post-bankruptcy are higher, as most creditors would not approve you for a loan if you have consistently been late with paying your bills. They view you as a bankruptcy filer waiting to happen.
3. Not All Debts Will Discharged
Not all debts are forgiven in a Chapter 7 bankruptcy. If you have student loans, child support obligations, or tax debts younger than 3 years, you will continue to owe these debts despite your bankruptcy filing. The “automatic stay,” which stops all collection efforts during the pendency of your filing, does not apply to the aforementioned obligations. There is no relief associated with these three categories of debt.
4. The Bankruptcy Process Takes Time
A Bankruptcy discharge does not happen overnight. It is a process that takes a minimum of three to five months in New York. Although the automatic stay is instant, a discharge requires the bankruptcy court to enter a final order closing the estate. The allotted time frame provides ample time for a debtor to file all necessary documents with the court, a creditor to file a claim, and for the trustee to determine whether any non-exempt assets exist so creditors can be paid.
5. Bankruptcy Fraud
Your case will be dismissed if it is revealed that you are hiding assets, have sold assets to avoid paying creditors, or incurred debt with the intent of filing for bankruptcy. Depending on how serious the fraud is, you may face criminal charges.
Mishiyeva Law- Bankruptcy Lawyer NYC 80 Wall Street New York, NY 10005 (646) 736-6328