Filing for bankruptcy often stirs up plenty of questions for those who are wondering whether it is the right decision for them. When making a big decisions regarding finances, it makes sense that people want to know what they are getting themselves into before jumping in. Here, some of the most common questions related to bankruptcy, including the filing process and what happens after bankruptcy, are answered!
After filing for bankruptcy, can I apply for a new credit card?
It is possible to get a credit card after filing for bankruptcy. But, the one major difference is that they probably won’t be the same offers you had received before. You may have higher fees and interest rates, along with a more restricted line of credit. Those who are worried about being denied a standard credit card, can apply for a secured credit card instead. With secured credit cards, you put in a certain amount of money first and then that amount is the credit limit under your account. Then, if you make payments on time then you can begin to raise your credit score.
Are my assets and belongings at risk if I apply for bankruptcy?
This depends on what type of bankruptcy you file for. For example, if you apply for chapter 7 bankruptcy, then you have to make a list of your debts, property, and assets. There may be limits on how much property you can keep while eliminating your debt. But, there are exemptions for certain kinds of assets, like a house or vehicle. If you apply for chapter 13, then you will most likely be permitted to keep most of your property.
Will I have to go to court about operating under a bankruptcy chapter?
The only time that you may have to deal with a legal proceeding is if there are disputes that cannot be resolved between you and your creditors. You won’t actually attend court, but you will be required to go to a meeting with a representative from your creditors for a solution. The meeting usually occurs within a month or so after the date of your bankruptcy filing. If you filed to operate under chapter 13, you may have to attend a hearing to solidify your payment plan.
What is chapter 7 bankruptcy compared to chapter 13?
Those who opt for chapter 7 bankruptcy are essentially getting assistance with eliminating their debts by letting their property or belongings be confiscated. Another term for this chapter is “liquidation bankruptcy” because the debtor’s assets may be taken as payment towards outstanding debts. Compared to chapter 13, where the debtor must abide by a repayment plan over the course of 3-5 years. After that, the rest of their debt may be eradicated. The best way to find out what chapter is best for you is to consult with a bankruptcy lawyer, so they can assess your situation and offer advice.