Frequently Asked Questions

GENERAL

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What happens to my credit if I file bankruptcy?  When you file a bankruptcy, your credit score will typically drop to 450 - 500.  If your credit score is already close to or below that, you may find that filing bankruptcy gives your credit a little bump up.  Chapter 13 remains on your credit for seven years and Chapter 7 remains on your credit for ten years.  Many people find that they are able to obtain credit for bigger items (cars, houses, etc.) with normal interest rates within 18 - 24 months of receiving their bankruptcy discharge.  Check out these PDFS from the South Carolina Department of Consumer Affairs for more information on Credit Reports:  What They Are and Why They Matter and Credit Repair.

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CHAPTER 7

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Can I keep my house and/or car if I file Chapter 7?  The job of the Chapter 7 Trustee is to ensure that no assets exist that would allow you to make a meaningful payment to your creditors.  People who file for Chapter 7 can use exemptions to protect assets they wish to retain when going through the Chapter 7.  For instance, over $60,000 in equity (value over and above liens) on a home can be protected by a single debtor.  An attorney can best examine your specific assets and goals and determine if a Chapter 7 would allow you to shed your debt and still retain the assets that are important to you.

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CHAPTER 13

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Can I buy a house or car if I am in Chapter 13?  If you need to take on debt while you are a debtor in an active bankruptcy case, you will have to get permission to do so from the Court.  To get Court permission, you will need to provide the total amount of the loan you wish to take out, the interest rate, the length of time you will have to make payments, and the amount of the monthly payment to the Court.  If we are able to show that the debt is reasonably necessary, that you can pay your Trustee payment along with the monthly payment on the debt, and meet other Court requirements, taking on debt can often be approved by the Court.  For a debt of $25,000 or less, permission from the Court can often be obtained in a couple of weeks.  For debtor more than $25,000, permission from the Court takes 30 - 45 days.  

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VIDEOS

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Bankruptcy Basics Video - What is bankruptcy? What happens in a bankruptcy case? Bankruptcy is a legal process that provides relief for individuals who can no longer pay all of their debts. If you are considering bankruptcy, this video will give you basic information about the process, the relief it offers, and how to find the legal help you may need.

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Types of Bankruptcy Video - A brief review of the three main types of bankruptcy cases for individuals chapters 7, 11, and 13. The most common types of bankruptcy are chapter 7, which are liquidating bankruptcy, and chapter 13 cases, often used by individuals who want to catch up on past due mortgage or car loan payments and keep their assets.

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Limits of Bankruptcy Video - Certain types of debt, such as child support, alimony, and most student loans, cannot be discharged in bankruptcy. Wrongful conduct may make some debts non-dischargeable. Examples of such conduct are incurring credit card charges without the intent or ability to repay, or obtaining loans using false financial information.

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Filing for Bankruptcy Video - How does someone file a bankruptcy case? In order to file for bankruptcy, an individual must take a credit counseling course to learn about alternatives to bankruptcy as well as accurately complete and file a number of documents.

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Creditor's Meeting Video - Every debtor is required to appear at a creditors' meeting conducted by a trustee who asks the debtor questions about the debtor's financial condition and gives creditors the opportunity to do the same.

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Bankruptcy Crime Video - A debtor must be honest and accurate in dealing with the court or face serious consequences, including being charged with a bankruptcy crime.

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Bankruptcy Court Hearings Video - In some cases, a debtor may be required to appear at hearings before a bankruptcy judge.

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Bankruptcy Discharge Video - Debtors are usually able to discharge most or all of their debts. Once a debt is discharged, a creditor may not attempt to collect it from the debtor.

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Bankruptcy Legal Assistance Video - When does someone need a lawyer for a bankruptcy case? Individuals have a right to represent themselves in court, but bankruptcy is a complex area that involves many considerations including whether to file, what chapter to file under, and what exemptions to claim. It is important to understand all of the protections of the bankruptcy code in order to make full use of them.