Bankruptcy FAQ

Will my employer know I filed bankruptcy?

Not unless you owe your employer money - only creditors (people you owe money to) are notified about you filing.

Will the court turn me down?

No, there is no minimum amount of debt you need to file. However, we recommend not filing if you have less than $10,000 in unsecured debt.

The could could dismiss your case (turn you down) if you lie, don't show up for court or otherwise don't cooperate with the Trustee and the court. Fraud is anothe rreason to dismiss your case - for example if you hide assets.

But if you cooperate completely and honestly, you will have no problem.

Will my name be published in the newspaper?

No, if you live in the Chicago collar counties (DuPage, Kane, Kendall, Will, LaSalle). In these areas only large companies make the paper when they file bankruptcy. Thousands of ordinary people file every week and escape public attention.

Bankruptcy is a matter of public record and new websites are poping up all the time so if someone really wants to find out if you filed bankruptcy they probably can. However, most people don't care.

Will I be forced to close my bank account?

No, but you may want to. If you have a credit card with your bank, the bank may freeze your account before you have a chance to file bankruptcy and maybe even after you file bankruptcy.

Additionally, if someone has sued you and obtained a judgment, you may want to close your bank account so that they can't seize it.

Finally, if you close your bank account or don't have one, you should open an account prior to filing bankruptcy. Most credit is easily obtained after bankrutpcy but a bank account is very difficult - so go into bankrptcy with a bank account open and at a bank you do not owe money to.

Can my creditors stop me from filing bankruptcy or not "accept" my bankruptcy?

No. You have a right to file for bankruptcy protection and no creditor can prevent you from doing so.

Creditors can object to a specific debt being discharged. A typical reason is fraud. If you charge a large amount on your credit card shortly before filing for bankruptcy, that credit card can object and try to make you payback those recent charges.

Is it true that I won't be allowed to get a credit card for ten years?

No, it's not true. Although the bankruptcy will remain on your credit report for ten years, there is no prohibition against obtaining credit after your bankruptcy. The issue is will someone give you credit. The answer is yes. Usually, a credit card is easy to get after a bankruptcy as is a car loan. Yes, these may not be at the lowest interest rates but they are a place to start rebuilding your credit.

Generally, a mortgage will take one to two years before you will be able to get favorable terms.

Can I keep my car?

You may keep your car as long as you are current on the payments and it is insured. Although your car lender is notified you filed bankruptcy you may keep your car if you sign a "reaffirmation agreement" with the lender.

A reaffirmation agreement reobligates you on the loan and protects the lender if you later default. Car lenders would usually rather that you keep your car and make payments than surrender the car and owe them nothing.

The only way you would not be able to keep a car you are making payments on is if it was worth substantially more than you owe on it. You should discuss this with one of our attorneys if you have any concerns.

Will my landlord be told I'm filing bankrutcy, and if so, will I be evicted?

No, your landlord is not notified you filed bankruptcy.

An exception is if you want to discharge back rent you owe. In that case we would list your landlord as a debt and discharge any rent that came due before you filed bankruptcy.

Do I have to file with my spouse?

No, you don't have to file with your spouse. You may want to if you are both on the debt though. If you have joint debts and only one of you files then the creditors can go after the non-filing spouse and you have gained nothing.

I have a loan that my parent cosigned on. If I file bankruptcy, can the creditor go after my parent?

Yes. The creditor cannot come after you but they can go after any cosigner. You may however continue to make the payments and that will keep the creditor happy and they will not go after your cosigner.

I already have a judgment against me. Is it too late to file?

No, a judgment can be included in bankruptcy.

One exception is that if the creditor recorded a memorandum of judgment in the county where you own real estate, then the judgment lien will remain on you house and you will have to pay it when you sell your house. Sometimes you can avoid the lien and not have to pay it, but this is complicated and you should consult with one of our lawyers regarding your options.

Do I have to go to court?

Yes, one time. You will have to attend a first meeting of creditors. Don't worry, creditors rarely show up and the meeting is held in a conference room with your attorney, an attorney called a trustee and you. The meeting will take about ten minutes and you will be fully briefed by one of our attorneys prior to meeting with the trustee.

MORE Chapter 13 FAQ's?

Visit Glenn Stearns Chapter 13 Trustee for the collar counties web site at http://www.lisle13.com