How long will a bankruptcy stay on my credit report?

A bankruptcy filing generally stays on your credit report for 10 years following a discharge in a chapter 7 proceeding and 7 years following discharge (after completion of your 3 to 5 year chapter 13 plan) in a chapter 13 proceeding.  However, having a bankruptcy proceeding reported on your credit report does not mean that you will not be able to obtain credit for that period of time after bankruptcy.  Many people can qualify for credit immediately after receiving their discharge and can even obtain a home loan within 3 years following discharge.

Do I have to list all of my creditors even if I intend to pay some of them?

The bankruptcy process requires that you be truthful and accurate with respect to your financial condition which means you must list all of your assets and all of your debts.   In fact, most credit card companies will close your account whether you include them or not, as they generally subscribe to credit reporting services that will report the bankruptcy filing.  However, your after bankruptcy income (in chapter 7) is yours, and if you wish to pay a listed creditor after you file you are free to do so.

Are all debts going to be discharged in my bankruptcy?

Generally, all unsecured obligations will be discharged in bankruptcy with the exception of federal or state income taxes incurred within the past 3 years, obligations for child  or spousal support or incurred in connection with a dissolution proceeding and student loans, whether public or private.   In addition, if an individual creditor believes that a debt was incurred fraudulently, that creditor has a limited right to challenge the discharge of the debt owing to them.

Can I keep my house and car if I file bankruptcy?

When you file bankruptcy you usually have several choices with respect to a car loan or lease.  You can continue to make the payments on the car loan or lease (you may have to reaffirm the debt, which means that the Court  has to approve the agreement) or you  can surrender the vehicle and discharge any deficiency incurred as a result of the surrender.  As to a mortgage, if the property has no equity for the bankruptcy estate, you can either continue to make mortgage payments and keep the property or you can elect to walk away from the property without being able to be sued by the lender for any shortfall after foreclosure.

If I am married, does my spouse have to file bankruptcy with me?

Married couples do not need to both file bankruptcy together, but because California is a community property state, all household assets and all household income and expenses must be disclosed.  Listing joint debts means that creditors will not be able to pursue community assets.  If you file alone, your bankruptcy should not appear on your non filing spouse’s credit report.

Who will know that I filed bankruptcy?

Although bankruptcy filings are public record, it would be very rare that a relative or friend who was not a creditor would discover that you filed bankruptcy.  Generally, only those parties identified as creditors in your bankruptcy petition would know that you filed.

If I choose not to file bankruptcy, what can creditors do?

Although every situation is different, creditors can call you to coerce you into paying a debt.  If you don’t pay, they eventually could file a lawsuit against you, and if they obtain a judgment, could garnish wages, seize funds from your bank account or put a lien on your house.  The commencement of a bankruptcy proceeding prevents creditors from doing any of those things or stops them if they have started.  Further, once the bankruptcy is filed, creditors are not allowed to call you, write to you, sue you or otherwise attempt to collect even if a judgment had been entered against you before you filed the bankruptcy case.

Will I be able to rent an apartment after filing for bankruptcy?

Although there is nothing that legally prevents you from renting an apartment, many apartment owners will require a credit report and may be hesitant to rent to someone who has recently filed bankruptcy.  Often, an offer of an additional security deposit or a guaranty from a friend or family member will get you past that obstacle.

Do I have to go to Court when I file bankruptcy?

When you file either chapter 7 or chapter 13, a trustee is appointed by an agency of the US Department of Justice.  That trustee is a private person, not a government employee, and his or her job is to determine whether you own assets that are not legally protected by law and that could be sold to pay your creditors.  You will meet with the  trustee in a meeting room, not in a Courtroom and not in front of a judge.  Generally, that appearance , which is generally fast and routine, will be the only time that you will have to make a personal appearance.  I will accompany you to that meeting.