Will I ever get credit again?
Yes, you can get credit again. The bankruptcy laws are designed to provide you with a fresh new financial start. Many of our bankruptcy clients that have completed bankruptcy have been able to obtain new credit in as little as six to twelve months.
Will I be able to purchase a house after I file for bankruptcy?
Some lending institutions offer mortgage financing to individuals who have filed for bankruptcy within one to two years after receiving a discharge. Filing bankruptcy can actually be helpful when purchasing a home because it improves your debt to income ratio and takes care of your old outstanding debts that many mortgage companies would otherwise require you to clean up before lending.
Will I lose my job if I file bankruptcy?
No. It is a violation of Federal Labor laws for an employer to discriminate against an existing employee because they filed for bankruptcy.
Can I ever file for bankruptcy again (after getting a discharge) if I need to?
Yes. Chapter 7 can be filed eight years from a previous Chapter 7 filing or six years from a previous Chapter 13 filing. Chapter 13 can be filed four years from a previous Chapter 7 filing or two years from a previous Chapter 13 filing. All waiting periods are from the date the previous case was filed to the date the new case is filed. Since most Chapter 13 cases last from three to five years, there is usually little or no waiting period to file either a new Chapter 7 or 13 after getting a discharge in a prior Chapter 13.
Can I file bankruptcy with or without my spouse?
Yes. The time periods stated above only apply if your prior case was discharged. If your case was dismissed, you can file again with no waiting period subject to some restrictions during a one year period after the dismissal. These restrictions generally only affect filing a new Chapter 13 case. If you file again after dismissal, the law looks at how many bankruptcy cases you have been a debtor in during the past 365 days. If you have been in other bankruptcy actions within that period, the law requires you to file additional motions to extent or impose the automatic stay for court protection
Will my bankruptcy affect my spouse's credit?
Generally no. When one spouse files for bankruptcy, as long as none of the debts scheduled by you are joint debts with your spouse, your spouse's credit is generally not affected.
Can I discharge income taxes in a bankruptcy?
Some income tax liabilities can be discharged in either a Chapter 7 or Chapter 13. Taxes that are less than three taxable years old are not dischargeable. If income taxes are at least three taxable years old, they are subject to discharge. You calculate the three years based on the taxable year that comes due each April 15. If the taxes are more than three years old but were not filed on time, they must have been filed for at least two years and have been assessed for more than 240 days to be dischargeable. While income taxes are sometimes subject to discharge, taxes owed that are considered trust fund taxes are not dischargeable. Examples of these would be payroll taxes or sales tax owed by your business activities. The criteria for discharging income tax is complex and should be reviewed by an experienced bankruptcy attorney.
Is the bankruptcy process long and difficult?
No. The typical Chapter 7 case takes approximately four months from the date that the petition is filed until the date a discharge is issued by the Bankruptcy Court. The bankruptcy process, while complex and sometimes confusing to the average person, is a relatively straightforward process when you are working with an experienced bankruptcy attorney.
Will bankruptcy take care of child support debts?
Child support cannot be discharged in any bankruptcy action. Child support arrears can be reorganized in a Chapter 13 and that will allow you protection from collection on the arrears during the time you are in the Chapter 13. The ongoing child support obligation continues.
Does my divorce decree protect me from creditors that I once owed but my spouse was ordered to pay?
No. A divorce decree only determines the right of the two parties involved. If your ex-spouse does not make the payment on the debt, the creditor can come against you. Your divorce decree gives you the right to take legal action against your ex-spouse for non-compliance, but that is not binding on the creditor. That is why it is best to list all debts you owe in the bankruptcy including those addressed in your decree. Then you do not have to worry about this happening later on.
Is it wrong to file bankruptcy?
If you are reading this now, it probably means you realize you have debt problems and you are trying a take positive steps to regain control of your financial situation. Life sometimes throws us curves that we never could have imagined. The bankruptcy laws have been designed to help people address their financial difficulties in an honest, straightforward manner. There is nothing wrong about that.
Frequently Asked Questions
Is there is a minimum amount of debt you must have before you can file bankruptcy?
No. There is no minimum.
Will I lose all of my property?
No. Certain real and personal properties are classified as exempt, meaning that you can keep the property and still receive a discharge in bankruptcy. Under Arkansas law, you can claim several thousand dollars in various exemptions. Most people fall well within these exemptions and keep all of their real and personal property. If you file Chapter 13 you can keep all of your property regardless of exemptions so long as the unsecured creditors get paid at least as much as they would in a Chapter 7.