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4 More Frequently Answered Questions About Bankruptcy

Ferguson Hayes Hawkins, PLLC Jan. 25, 2017

Filing personal bankruptcy can often be a confusing time in your life. With so much taking place, it is easy to understand that you would have questions for your Concord bankruptcy lawyers. In an effort to ease your stress level, we have compiled four more of the most frequently asked questions by people who are filing Chapter 13 bankruptcy.

1. Will I Lose My Home when Filing Chapter 13 Bankruptcy?

In most cases, you will not lose your home when you file for this type of bankruptcy protection. Since Chapter 13 is a type of debt restructuring, your mortgage payments will be considered when the repayment plan is being created. Your attorney will be able to explain this aspect of your case in depth at your consultation. 

2. Can I Keep Some Of My Credit Lines?

You cannot pick-and-choose which creditors you want to keep and which debts you want discharged. When you file for bankruptcy protection you must include all of your debts. Most creditors will close your credit lines, even if you have a zero balance, once you have filed for protection. If you are able to keep a credit line open once you file for bankruptcy, the creditor may limit your credit line, charge higher interest rates, or require you to place a deposit on your account. 

3. Can I Have My Student Loans Discharged?

In most cases the answer is no. Student loans are considered a different type of debt than regular unsecured debts. However, there are always exceptions to this rule. If the Court finds that repaying these loans would cause too much undue hardship, they will discharge the debts.

4. Will I Ever Reestablish Credit?

Yes. It will take some time, usually 18 months to two years before you can start establishing credit lines again, but you will be able to in the future. Some credit card companies may allow you to establish credit at an earlier point if you open a secured credit card. However, if you are in a Court repayment plan, it is probably wise to refrain from establishing any new credit before your repayment plan is completed. 

Our Concord bankruptcy lawyers will be glad to answer any additional questions you may have about filing personal bankruptcy.