What will happen if I file bankruptcy?

Most people have at least some incorrect perceptions and unfounded fears about bankruptcy.  Below I discuss a few I have come across over the years.  I hope that by dispelling some of these widely held myths, I can help you to determine whether bankruptcy is the right course for you. My initial phone consultation is free. You owe it to yourself to call.

If I file bankruptcy will I lose all my property?

The bankruptcy code allows individuals to exempt (or protect) certain amounts of various types of assets. Because of recent amendments to the laws regarding exemption allowances, (for which I provided testimony on Beacon Hill on behalf of the Boston Bar Association urging greater protection), Massachusetts has some of the greatest protections of personal property in the Nation.  Most people who file for bankruptcy protection do not lose any property at all. Those with substantial property can usually keep their property if they agree to repayment plan of some or all of their debt.

Will I be able to ever get credit again after filing for bankruptcy?

It is possible to rebuild your credit within months of filing bankruptcy. In many cases, clients report having an easier time obtaining credit after the bankruptcy freed them from so much debt.  I can work with you to teach you ways to rebuild your credit quickly after bankruptcy.

Will I lose my retirement account if I file for bankruptcy?

Moneys contributed to qualified retirement accounts are generally exempt. In almost all cases, you can keep your pension, IRA, and 401(k) in bankruptcy.

Will filing for bankruptcy make me lose my job?

Generally, employers will not find out about the bankruptcy, unless you choose to tell them. The bankruptcy code prohibits private employers from firing someone (or taking any other adverse action) for  having filed a bankruptcy. However, the courts have been eroding this law over the past few years and there are some types of jobs where a bankruptcy filing is allowed to be taken into consideration for employment decisions.

Will my bankruptcy damage my spouse’s credit?

When one spouse files for bankruptcy protection, his or her spouse’s credit is generally not affected.

Will bankruptcy help if I owe taxes?

While it is true that some taxes can not be discharged, others can be. There are many rules about the dischargeability of taxes which an attorney can explain to you. I would be happy to review your situation and discuss your options.

How does the bankruptcy process work?

For your initial consultation with me, you will need to bring with you information on your debts (including your credit card debt, any lawsuits, foreclosures or repossessions, tax, student loans, or medical bills) and about property you own (bank accounts, real estate, cars, retirement accounts, etc.). I will review your financial situation with you and discuss the benefits of various options available to you including bankruptcy.

If you decide that you want to file for bankruptcy, I will prepare all the necessary documents including the Bankruptcy Petition. When your case is ready to file, we will then meet again so that you can carefully review these documents before I file them with the Bankruptcy Court. [Read more…]

What should I do to prepare to file bankruptcy?

If you are considering bankruptcy, the first thing you should do is contact an attorney to discuss what options are available for your specific situation. However, there are certain things which you can do to prepare for bankruptcy before you meet with an attorney.

Stop using your credit cards

Any charges you make or money that you borrow with the intention of having the debt wiped out in bankruptcy instead of paying it can prevent you from discharging that debt or even be considered as fraud. You should consult an attorney before incurring any additional debt. [Read more…]

How will bankruptcy affect my credit?

For some people, a bankruptcy filing is the fastest, most effective way to rehabilitate their credit. A bankruptcy filing can remain on your credit report for up to 10 years.  However, banks understand that discharging your debt in bankruptcy usually enables you to stay current on living expenses and new loan obligations.  Banks also know that you are prevented from filing another bankruptcy for 8 years after receiving a Chapter 7 discharge. In the bank’s eyes, individuals once laden with debt are frequently a much better credit risk after having obtained a Discharge in bankruptcy. [Read more…]