Can I keep my house, car or other property when I file for protection under the federal bankruptcy laws?


Generally speaking, if your property is secured as collateral for a loan, i.e., if you are financing your vehicle purchase or have a mortgage and you want to keep that property, you must keep making the existing mortgage or car payment, except in certain circumstances where you are able to get rid of completely unsecured liens. In a Chapter 13 you may also be able to modify the terms of the secured debt through your payment plan. Certain other property is categorized as exempt and will be excluded from your bankruptcy estate.

In a properly prepared Chapter 13, your other, non-exempt, property will be protected from your creditors by virtue of your payment plan. You may also be able to protect non-exempt property in a Chapter 7 by making payments to your Chapter 7 trustee.


Are there restrictions on what debts can be permanently discharged under Chapter 7?


Yes. Alimony, child support, and some death or personal injury judgments against you are in most cases, not dischargeable in bankruptcy. Student loans are also generally not dischargeable unless you can prove undue hardship. You will have to pay any fines levied against you by the government as well as any restitution as part of a criminal sentence. There are also restrictions on discharging certain tax debts.


Can creditors call me at work to try to collect on a debt?


If you have filed for bankruptcy protection, the answer is no. When you file, an automatic stay immediately goes into effect, prohibiting your creditors from calling, writing or pursuing legal action to collect a debt.


How will my credit be affected?


In accordance with the Fair Credit Reporting Act, a bankruptcy can remain on your record for a maximum of 10 years. Even before it is cleared from your record, however, you may find that your credit rating improves. Creditors look at your debt-to-income ratio when they make decisions about offering credit. After you successfully complete a bankruptcy, your debt-to-income ratio will be better than it was previously. You can re-establish your credit, often within 24 to 48 months of a bankruptcy filing, and may begin to see improvements immediately after receiving your discharge.


How can I improve my credit after filing?


There are a number of steps you can take to improve your credit after bankruptcy, including:


  • Watch your spending. Do not let your debt-to-income ratio get out of control.

  • Pay your monthly bills and make loan payments on time.

  • Check your credit report three months after your bankruptcy is complete to make sure all discharged debt is being properly reported. If there are errors, these will need to be worked with the credit reporting agencies to have them corrected.


It is a good idea to obtain a copy of your discharge order to have proof that all dischargeable debts have been cleared.


SARDI LAW can assist you. Contact Us Today!! To set up a consultation, email us online or call our office at 305-697-8690.


SARDI LAW is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.