There are generally a large set of questions that many individuals ask about bankruptcy. These questions are important not only to a basic understanding of the bankruptcy process, but also the consequences on your financial life, and to dispel false bankruptcy myths. Remember that the answers to these questions are very general in nature and do not apply to each and every individual. Each person's financial situation is unique.
How Often Can I File for Bankruptcy?
The answer to this question can be a bit complicated. First, you need to look at each Chapter separately. For purposes of this article, most people will only be interested in/eligible for Chapters 7 and 13.
For Chapter 7, you cannot file a bankruptcy until 8 years have passed since the date of filing of your prior Chapter 7 bankruptcy. For Chapter 13, you must generally wait 6 years after the filing of the prior Chapter 13 case (there are some exceptions, such as if you paid 70% of the creditor claims in the prior case and it was your best effort).
Please note that these deadlines only apply if you received a bankruptcy discharge. So, if your case was dismissed, you can re-file immediately. Also, there are certain circumstances where you may wish to file both Chapter 7 and then Chapter 13. In that case, even if you received a Chapter 7 discharge, you can immediately thereafter file a Chapter 3 case (although you can't get a discharge in the Chapter 13 case).
How Long Will a Bankruptcy Stay on My Credit Report?
A bankruptcy in which you received a discharge will stay on your credit report for 10 years. If you filed a Chapter 13 case and it was dismissed, it will remain on your report for 7 years. A dismissed Chapter 7 case remains on your credit report for 10 years.
If I Am Married, Does My Spouse Also Have to File for Bankruptcy?
Strictly speaking, no, there is no requirement that a married spouse also need to file for bankruptcy. However, the spouse may want to file for bankruptcy if the spouse is also liable on the debts.
If I File for Bankruptcy Will it "Wipe Out" the Debt?
Yes and no. The bankruptcy discharge is personal, this means that it "wipes out" your obligation to pay the debt (except non-dischargeable debts). So, if someone else owes on the debt, then the creditor can still collect from that other person. In that sense, the debt still exists even after the bankruptcy filing. However, if you are the only person obligated on the debt and you receive a discharge, the debt is effectively wiped out (it technically still exists, but the creditor cannot collect on it).
In the case where a creditor is secured, which means they have a lien on your property (such as your house), the bankruptcy discharge will not wipe out the lien. This means the creditor can foreclose on the property to satisfy the debt.
Is Bankruptcy Different from State to State?
No! The bankruptcy laws are federal statutes and the bankruptcy courts are units of the United States District Courts, which are federal courts. Although the bankruptcy courts in one district may interpret laws differently than another district, the laws being interpreted are the same.
This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this article does not create an attorney-client relationship between the author of this article and the user or browser.