Consumer Bankruptcy FAQs

Bankruptcy Questions

How will bankruptcy affect my credit?
Situations occur in life that can cause one’s debts to become overwhelming. Lenders realize that people learn from their experiences. Just because someone’s debts were out of control at one time, does not mean their future debts will go unpaid. Issuers of credit (banks and credit card companies) are free to consider your bankruptcy when deciding whether to extend you credit. Bankruptcy filings are generally listed in credit reports for up to ten (10) years. Some companies may extend credit to you right away, usually at higher interest rates, while others may be willing to extend credit to you after two (2) years have passed as well as the possibility of obtaining a secured credit card. There may be some businesses that will choose to wait until after the filing of your bankruptcy is no longer on your credit report.
Will I qualify for Bankruptcy protection?
In 2005 Congress passed new laws restructuring bankruptcy options. A Means Test is now required to determine eligibility of Chapter 7 filings. Generally, if you do not qualify for a Chapter 7 you can file bankruptcy protection under Chapter 13.
Will a Bankruptcy filing stop creditors from suing me and stop their collection calls?
Once your bankruptcy is filed, creditors cannot continue to call, send collection letters, cannot sue, repossess or foreclosure. Creditors cannot garnish wages – even if a garnishment order is already in effect. And your utility companies must reconnect your service.
Can I file bankruptcy with my spouse?
There may be advantages or disadvantages to a joint filing with your spouse. This kind of decision would best be made after receiving legal counsel. Being well informed will enable you to make the ‘best’ decision for your set of circumstances.
If I file bankruptcy will I lose my home – will I lose my vehicle?
The Law in Texas is among the most debtor-friendly states in this country. Unsecured creditors (and the bankruptcy trustee) cannot take your house, your car, your furniture, your jewelry, etc. If you are behind in your mortgage and/or payments on your vehicle – a plan to pay the amount in arrears over a set amount of time (in monthly installments) can be arranged.
Which debts cannot be eliminated (discharged) in either a Chapter 7 or Chapter 13 Bankruptcy?
Debts you failed to list when you filed Bankruptcy, however there are a few exceptions to this rule.

Debts for child support and alimony.

Debts for personal injury or death caused by driving while intoxicated (drugs or alcohol).

Debts for student loans – few exceptions may apply

Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution.

Property taxes against property you want to keep.

Income taxes for the last three (3) years.

Mortgage payments in arrears – if you choose to keep your home.

Vehicle loans in arrears – if you choose to keep your vehicle.

Can I file Bankruptcy if I own a business?
Yes, you can file bankruptcy if you own a business; however, there are many factors to consider. Having sound bankruptcy legal advice is extremely important. Making well informed decisions should be your main concern.
In Bankruptcy, what is the difference between a Discharge and a Dismissal?
A discharge of a debt in bankruptcy means that the debt has been eliminated – the slate has been wiped clean. A dismissal in bankruptcy means that you did not honor your bankruptcy agreement and as a result your bankruptcy protection has been (or will be) dismissed and you become liable for all your debts. This allows your creditors to start the process of collections, foreclosures, repossessions and lawsuits all over again.
If I don’t have a SS number can I file bankruptcy?
Yes, you can file for bankruptcy. The IRS now allows debtors to apply for an Individual Taxpayer ID No. (ITIN) when they do not have a SS number.
How can I get more information?
If you are on the fence or are seriously considering Bankruptcy, please call DIAMOND LAW, (915) 532-3327, email or use our Live Chat to set up your free consultation appointment. Making this decision does not in any way obligate you to file bankruptcy or retain DIAMOND LAW. We understand that making this decision is difficult and emotional. It’s possible you may discover an alternative to bankruptcy that will help resolve your debt. Choosing bankruptcy is not a sign of failure – almost everyone at one time or other struggles with burdensome debt. Please fill out the free Bankruptcy Evaluation form so that we can review your case and be prepared for your free consultation.

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