|
|
Effects of Filing Bankruptcy
The completion of a bankruptcy proceeding can provide you with a “fresh start”. The court order called Discharge of Debtor will terminate your obligation to pay discharged debts. The order will not affect non-dischargeable debts such as alimony, child support, student loans, taxes, injuries caused by driving while intoxicated, debts incurred by deliberately injuring a person or property or debts incurred by fraud.
Your bankruptcy case will be noted on credit reports for up to ten years for Chapter 7, and seven years for Chapter 13, after the date the case was filed. During that time, lenders, stores and finance companies may consider your bankruptcy among all the factors when you apply for new credit. Frequently, since you cannot file in Chapter 7 again for eight years, it may be easier to obtain a mortgage loan or vehicle loan. Such applications are usually easier if you wait at least a year before applying for credit and show a history of paying your bills on time after the bankruptcy. However, many creditors will consider extending necessary credit after a discharge.
After your bankruptcy has been completed, be sure to keep your documents in a safe place for ten years. Sometimes creditors may try to contact you to collect debts that were discharged in the bankruptcy proceedings. These creditors may ask you to renew the debt to signing a new agreement to pay. You may voluntarily repay any creditor after bankruptcy. However, a creditor cannot attempt to force or coerce you into paying a discharged debt after bankruptcy.
|
|
