FAQ’s

1.  Will I lose everything if I file bankruptcy?

      No.  Typically, you can keep your home, a car or two, all your clothing, household furniture and utilities, retirement accounts, and even some jewelry and heirlooms. 

2.  Will everyone know if I file?

     No.  Although filing bankruptcy is public record, it is rarely published in the newspaper, or made a news item on radio or television.  Your neighbors, unless they typically review bankruptcy filings on the internet in your district, will never know unless you tell them.  

3.  What will happen to my credit score?

     Most people who file bankruptcy have a lower than average FICO or credit score when they start the process.  Generally, it will drop further when the credit bureaus become aware that you filed.  After that initial drop, however, credit scores tend to rise after a bankruptcy is filed.  It might take a year or two and there are several things that you can do to improve it right away.  

4. How long will the bankruptcy stay on my credit report?

     A bankruptcy filing will stay on your credit report for 7 years if you file a Chapter 7 bankruptcy and for 10 years if you filed a Chapter 13 bankruptcy.  But they generally will not be a hinderance or limit your FICO score after a year in a half to 2 years. Even the Federal Government indicates that after a year or two from filing bankruptcy, in most cases, the bankruptcy will not prevent you from qualifying for a Government insured loan to buy a house.

5. How long does it take to file bankruptcy?

     Once you have decided to file, there are forms that need to be carefully prepared and reviewed, signed and then filed.  That can take anywhere from a couple of days to a week or two.   The quicker you can get the information needed – typically, a list of debts and assets – to your attorney, the sooner the forms can be prepared.

6. How much does it cost?

    Most Chapter 7 consumer bankruptcies cost between $1500 and $2500.  On top of that are filing fees which go to the court, and additional charges for the two credit counseling courses that need to be completed.  For a Chapter 13 bankruptcy, the typical price for a consumer or married couple is $4000 plus costs.  But, whereas most attorneys require you to pay the entire cost for a Chapter 7 before it is filed, most attorneys will allow you to pay part of the Chapter 13 cost before foiling since they can build the rest of the payments into the normal monthly payments made in the Chapter 13.

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