Frequently Asked Bankruptcy Questions

How will filing bankruptcy affect my credit? Generally we see clients with lower credit scores (450 – 550) increase 50 – 100 points after filing.  Clients with mid range scores (600) stay about the same and higher credit scores (700 or above) decrease 40 -80 points. We have started referring our clients to www.creditcarma.com to check their credit score prior to filing. This allows the person to see first hand how their credit score is affected. We also pull all clients credit reports and credit scores prior to filing and use a bankruptcy program that estimates how clients credit score will change.

Can I purchase a car after filing bankruptcy? Yes. Under chapter 7 bankruptcy clients have a better chance of being able to purchase a vehicle after they file than chapter 13 bankruptcy.  The chapter 7 bankruptcy is completed in about 4-6 months. After receiving a discharge and getting rid of all or most of your debts, purchasing a vehicle is possible.  You just might have to shop a little more than a person without a bankruptcy on their credit. Under chapter 13 bankruptcy you are making payments to the trustee to pay your debts and therefore have to petition the bankruptcy court in order to purchase a vehicle.

Can I purchase a house after filing bankruptcy? Yes, but most mortgage companies will not lend money for at least 2 years after completing of a chapter 7 or chapter 13 bankruptcy and receiving a discharge.

Will bankruptcy stop a wage garnishment? Yes, chapter 7 or chapter 13 will stop a wage garnishment, immediately when filed.  Our office can file an emergence petition with the Federal Bankruptcy Court and fax the case number to the creditor and stop the garnishment.

Will bankruptcy stop a bank account garnishment? Yes, chapter 7 or chapter 13 will stop a bank account garnishment, immediately when filed.  Our office can file an emergence petition with the Federal Bankruptcy Court and fax the case number to the creditor and stop the garnishment.

Will bankruptcy stop a repo / repossession of a vehicle?Yes, chapter 7 or chapter 13 will stop a vehicle repo / repossession, immediately when filed.  Our office can file an emergence petition with the Federal Bankruptcy Court and fax the case number to the creditor and stop the repo / repossession. However, chapter 13 bankruptcy is generally the only chapter one can file to permanently save the vehicle from being repossessed.  Chapter 7 will temporarily stop the repossession but the debtor will have to redeem the vehicle prior to the expiration of the automatic stay.  Consult an attorney. There are other nuances to stopping a repossession.

Can I file bankruptcy without my husband / wife / spouse? Yes, an individual can file with out their spouse or their spouses permission. However, their income must be included to determine if the individual qualifies to file. All income for the household must be include into the equation but all expenses can also be include.

Will bankruptcy affect a co-signer / co-debtor? Yes and no. If a person files bankruptcy the co-signer / co-debtor is still liable for the debt. As long ads the debt gets paid on time by someone the no-filing persons credit should be fine.

How long can I stay in my house after surrendering it in bankruptcy? It just depends on how far along the state court foreclosure proceeding is when you file. When a bankruptcy case is filed the foreclosure process stops until the creditor gets relief from the automatic stay.  This can take as long as 2-3 months or as fast as 20 days.  Once this happens the creditor picks up where they were in the foreclosure process when the bankruptcy was filed.  The foreclosure process generally takes 3-6 months from start to finish. However, because of the drastic increase of foreclosures in Florida, this process can take much longer.

Do I lose everything when I file bankruptcy? Generally not.  There are Federal and State exemptions that protect assets.  Depending on your situation you could lose things. However, if you have assets more than your allowed exemptions chapter 7 debtors can generally work out a buy back.  A buy back Is negotiated by the debtor to purchase back the unencumbered non-exempt equity in their assets.  Generally done over 10 – 12 months. Every case is different and can’t be compare to others.

The general exceptions for a person who doesn't declare a homestead are: $5,000.00 per person filing for any personal property; $1,000.00 per person filing for one vehicle only; 100% for qualified retirement accounts; plus others.

The general exceptions for a person who does declare a homestead are: $1,000.00 per person filing for any personal property; $1,000.00 per person filing for one vehicle only; 100% for qualified retirement accounts; plus others.

Do I have to pay income taxes after Foreclosure? Not if you file Chapter 7 or Chapter 13 Bankruptcy before the foreclosure sale. Yes if you let the foreclosure happen before filing a form of bankruptcy. Unless you have a really good tax person or a lot of deductions for the year the 1099 income is reported.