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Answers To Common Bankruptcy Questions

If you’re struggling to make sense of bankruptcy, you’re not alone. Bankruptcy law is full of confusing terms, and there are many misconceptions about it.

Below, you will find answers to common bankruptcy questions. At Babut Law Offices, PLLC, we’ve been guiding clients through the intricacies of bankruptcy in Southeast Michigan since 1991. Contact us for personalized guidance.

If I file for bankruptcy, will I lose my house? My car?

Filing for bankruptcy doesn’t automatically mean you will lose your house or car. In fact, bankruptcy can help you keep your home, vehicle and other belongings. The specifics depend on your situation and the type of bankruptcy you file. Our attorneys can help you pursue the right type of bankruptcy to protect what’s most important to you.

Will I ever qualify for a mortgage after filing for bankruptcy?

Yes, obtaining a mortgage after bankruptcy is certainly possible. You might need to wait a few years to qualify for a mortgage as you rebuild your credit. We can provide guidance on steps to take to improve your eligibility for a mortgage post-bankruptcy.

Will bankruptcy permanently ruin my credit?

Bankruptcy will impact your credit score initially, but it’s not permanent. By adopting responsible financial habits post-bankruptcy, you can begin to rebuild your credit over time. Many people find their credit scores can improve faster than anticipated after filing.

What is the difference between Chapters 7, 13 and 11?

Both Chapter 7 and Chapter 13 are consumer bankruptcies designed to discharge (eliminate) qualified debts so you can start fresh. Chapter 7 is a faster, easier process that results in a relatively quick discharge of debts for those who qualify. Your income and assets must be below a certain threshold to qualify. Chapter 13 involves reorganizing debts and creating a plan to pay creditors over time, usually in 3 to 5 years. Chapter 11, often used by businesses, involves a reorganization plan for repaying creditors while keeping the business operational.

What should I consider before filing for bankruptcy?

Consider your long-term financial goals and the types of debts you owe. Bankruptcy can relieve you from many debts, but not all (such as student loans in most cases). Understanding the consequences and benefits can help you make an informed decision.

Should I withdraw all the money in my bank accounts before filing for bankruptcy?

No, withdrawing all your money from bank accounts before filing for bankruptcy is generally not advisable and can be seen as fraudulent. It’s important to discuss your assets with a bankruptcy attorney to understand the best steps to protect your financial interests legally and effectively.

 

Talk To A Lawyer Today

If you’re feeling overwhelmed by debt and considering bankruptcy, let our attorneys help you explore your options. Contact us today at (734) 725-0316 to speak directly with a knowledgeable bankruptcy lawyer.