Bankruptcy is a legal procedure that allows a person unable to pay their expenses to start over financially. Federal law guarantees the right to petition for bankruptcy, and all bankruptcy proceedings are heard in federal court. Filing for bankruptcy instantly prevents all of your creditors from attempting to collect debts from you until your debts are resolved in accordance with the law. Here are the most common questions asked about bankruptcy law.
Will I have to give up my house or car?
Under Chapter 13, you are not required to give up your property.
However, under Chapter 7, It depends on how much value you have in your home. The trustee may decide to sell it if you have a significant amount of equity in it so that creditors can be settled.
Can I receive credit after declaring bankruptcy?
Yes, but certainly not to the extent you might assume. If you are already far behind on your expenses considering bankruptcy, your credit is likely pretty bad, and filing for bankruptcy may help your credit.
Can I buy a house after declaring bankruptcy?
Previously, you could buy a home two years after declaring bankruptcy. However, in recent years, creditors have been looking at down payment as well as the debt-to-income ratio.
