A bankruptcy will stay on a person’s credit for ten years, so it would negatively affect their credit score, although worries over credit scores are exaggerated. The credit industry does not want people to file bankruptcy so it has created a false alarm over credit scores. By the time most people come to file bankruptcy, they already have a number of problems on their credit report that are negatively affecting their score, so their credit score is already very low. A bankruptcy does not actually lower it any further than it already is. As a matter of fact, because those negative reports are taken care of after the discharge, their score actually improves a little bit and it becomes possible for them to then slowly rebuild their credit over time by using a credit card responsibly.
Meanwhile a person in a similar situation who decides not to file bankruptcy and to continue to struggle with not being able to make their payments, will get more and more negative reports, more and more creditors they are behind on and their score will drop lower and lower. Ultimately if they are ever able to crawl out that hole without the help of bankruptcy, it will be years and years down the road and their credit score will be decimated by then. A person actually rebuilds things much faster if they go through bankruptcy, so it can actually be a positive thing for a person’s credit. It has gotten a bad reputation mainly due to the credit industry perpetrating the myth to try to scare people away from filing bankruptcy.
Can Someone Obtain Credit While They Are On Chapter Seven?
Most of the time, a person will actually get a ton of offers for credit cards in particular, and car loans too, as soon as people receive notice of the bankruptcy filing. This happens because the creditors are aware that the person filed bankruptcy and they cannot receive another discharge for seven years, so there’s a good period of time during which the person is not a threat to file bankruptcy, and they know they can go through proceedings to get their money back if the person does not pay. Although the person will receive offers, the downside is that they will be at pretty high rates, so not only is it possible to obtain credit, but the person will actually have to turn people down because they will be breaking down the door trying to get them to take a new credit card or a new car.
Will A Person Lose All Of Their Property If They File For Chapter 7?
Chapter 7 debtors typically do not lose anything; however it is possible for them to lose some things which is why there is chapter 13 to protect them from loss of assets, so that is the better choice for people who have a house or something that they could potentially lose but want to keep. In chapter 7, there is a list of items that are exempt from the trustee’s ability to take and sell, so the person can have a certain amount of value in a car before the trustee can take it and there has to be a certain amount of value in a house. They can keep certain household items like the refrigerator, washer, dryer, dish washer and certain household items like furniture, clothing, jewelry and things like that. All of these have some exemptions that protect them from being taken by the trustee.
Furthermore the trustee will often have the technical ability to take something and sell it if he wants to, but in a practical sense it is usually not really worth it for them to do so. It would not be worth it for him to take a second-hand couch that is not exempt and sell it, because it would probably get him a $100 or $200 at the most. It would really not be worth it when it comes to all of his fees plus fees for setting up an auction, to sell something that will only bring in a small amount of money. The average person who does not have an exceptional amount of assets, like an expensive collection of jewelry or coins or something like that, would really not have to worry too much about losing anything at all.
Could A Chapter 7 Help Me If My House Was Going To Be Foreclosed And My Cars Were Being Repossessed?
A chapter 7 would probably be more helpful with the car. A person can file a bankruptcy petition if they know there is going to be a repossession or foreclosure, because the automatic stay will go into effect and prevent anyone from selling their house or car without the express permission of the bankruptcy court. Usually a car is an asset that would be exempt so a person would not have to worry about the trustee taking it and selling it, but it might not be as helpful in the case of the house, depending on how much equity is in it. It will stop the foreclosure proceeding but if there is enough equity in the house that it would not be exempt and the trustee would benefit from taking it and selling it, then it cannot be protected by an exemption. The only way then would be to delay the impending foreclosure. If someone was facing a foreclosure, it would probably be a better idea to look at a chapter 13 bankruptcy, but technically yes it would stop a foreclosure or repossession immediately, dead in its tracks.
Can A Person Just Refinance Their House In Order To Save It From Foreclosure?
A person could do that, and it is something that can be done independent of bankruptcy or in the bankruptcy as well. A reaffirmation agreement is an agreement between the person and one of their creditors that they will treat a debt a certain way and repay it with a certain interest rate and at certain amount per month. That debt would survive the bankruptcy loan, and even though all the other debts would be discharged, this one would not be. It is a way to pull something out of the bankruptcy and it can also be a way to save a house, car, or something like that where the person would still have a loan and they would still owe money on it but they did not want to lose it. This can happen in bankruptcy and there is always a possibility of refinancing things like that, independent of bankruptcy. There are also a number of federal programs that help with that, so there are different things that a person can do as far as the house. It can be a complicated process to determine whether or not a person is a good candidate to file bankruptcy or whether there might be something different that would be better for them.
How Does Filing A Chapter 7 Affect Collection And Other Legal Proceedings Filed Against A Person In Other Courts?
It is true for any chapter in bankruptcy and also applies to chapter 13, that an automatic stay goes into place when someone files a bankruptcy petition. It means that an order is created by the court the moment the person files, which prevents any creditor from bothering the person and asking for money. No one can contact them and no one can sue them. Even a lawsuit that has already been filed will be stayed and paused depending on the outcome of the bankruptcy. Once the bankruptcy is concluded, the lawsuit for a dischargeable debt in another case would be dismissed or any judgment will be vacated. The person would have immediate release from having to worry about any creditors contacting them and they would not have to make payments on any of those debts after filing the petition.
What Are The Primary Differences Between Chapter 7 And Chapter 13 And What Kind Of People Would You Recommend For Each?
A chapter 7 is really the best way to go most of the time, unless there is a reason to do a chapter 13. A person would go for a chapter 13 to keep an asset they did not want to lose, which 99% of the time would be a house. People do file a chapter 13 to avoid a foreclosure, but in general if someone has a higher income, but is struggling to make payments and wants to keep things as they are a chapter 13 can be a way to force the creditors to reorganize the debts a little bit. They do not want to lose any assets or move out of their house, they don’t want to have to sell their car, so the person would enter into a payment plan with those creditors and at the end of that plan the remaining debts would be discharged. A good way to look at a chapter 13 is as a reorganization. A chapter seven is just a straight bankruptcy, and the debts are discharged right away so the person moves on from there. It is usually better to do a chapter seven unless someone is trying to keep their house out of foreclosure or something similar to that. The attorney’s fees will be less, it takes a shorter amount of time, and it is just less messy, more straightforward and usually gets the job done a little bit better than a chapter 13.
What Is A Trustee In A Chapter 7 Case?
The trustee is like a referee, and it is his job to protect creditors and make sure that the person is not committing fraud. He is appointed when the petition is filed so the creditors will have an attorney, just like the debtor will have an attorney. There are a handful of attorneys who serve as chapter 7 trustees in bankruptcy cases, so each of them will have a lot of different bankruptcy cases for which they are trustees. Their job is to take any assets that can be sold, and distribute the proceeds of those sales among the creditors as necessary according to the law. It is mainly their job to investigate and make sure that the person is not committing bankruptcy fraud. They are like an escrow in a real estate transaction. They are a third party that oversees things and makes sure they go according to the law.
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