Stop A Foreclosure Repossession Or Eviction
The automatic stay will stop these actions as long as they’re still pending. Once complete, bankruptcy won’t help.
- Evictions. An eviction that’s still in the litigation process will come to a halt after a bankruptcy filing. But the stay will likely be temporary. Keep in mind that if your landlord already has an eviction judgment against you, bankruptcy won’t help in the majority of states. Learn more about evictions and the automatic stay.
- Foreclosure and repossession. Although the automatic stay will stop a foreclosure or repossession, filing for Chapter 7 won’t help you keep the property. If you can’t bring the account current, you’ll lose the house or car once the stay lifts. By contrast, Chapter 13 has a mechanism that will allow you to catch up on past payments so you can keep the asset. Find out more about bankruptcy’s automatic stay and foreclosure and car repossession and bankruptcy.
What Do You Lose When You File Bankruptcy
Most bankruptcy filers donât lose anything, actually. Property you own free and clear is yours to keep as long as thereâs a bankruptcy exemption to protect it.
Property that secures a lenderâs right to payment of a secured debt is yours to keep as long as you pay for it. The bankruptcy trustee doesnât even really get involved.
Can An Employer Fire Me For Filing Bankruptcy
While there has never been a ruling by the Supreme Court regarding this issue, there are several cases in which District Courts have passed down decisions on the issue of discrimination based on bankruptcy status.
The good news is, you cannot be fired by a public employer based on the fact that you have filed for bankruptcy. In addition, a public employer cannot refuse to hire someone because they have filed for bankruptcy or are in the middle of a pending bankruptcy filing.
When it comes to private employers, however, it can be a totally different question. A private employer may, depending on the state, be permitted to refuse to hire you based on the fact that you have filed for bankruptcy in the past. While Section 525 of the US Bankruptcy Code does prohibit employment discrimination against those who have filed bankruptcy, lawsuits for this sort of discrimination are rarely the subject of lawsuits.
In the case of Rea v. Federated Investors, the US Court of Appeals for the Third Circuit explored the idea of discrimination based on bankruptcy status. Mr. Rea had applied for a job with the Federated Investors, and despite a successful interview, he was informed that he had not been selected for employment due to a bankruptcy seven years prior. Rea filed suit, claiming that he had been discriminated against under Section 525.
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How Long Will It Take For My Credit Score To Rebound
The exact numbers vary, but it really depends on your starting point. A good credit score will likely drop more than 200 points. A lower score will drop between 130 and 150 points. Just about everybody who files for bankruptcy ends up with a credit score somewhere south of 600, some of them way south.
This can mean paying much higher interest rates on loans, assuming youd even qualify for them.
A Chapter 7 bankruptcy stays on your credit report for 10 years. A Chapter 13 stays on for seven years, but you can rebuild your credit over time by managing your debt smartly.
The best place to start is by making on-time payments and bringing past due accounts up to date. That is the biggest factor in your credit score.
The impact of bankruptcy lessens over time because some of your debt is reduced or discharged. That reduces your credit utilization ratio, which determines 30% of your credit score. FICO estimates it takes about five years for a score that was 680 to fully recover from a bankruptcy filing.
Will I Lose Everything If I File Bankruptcy
One of the questions I get is Am I going to lose everything or what will I lose if I file a bankruptcy? The answer to that question is No, but it is a technical no. What happens when you file bankruptcy is that you create an estate, and an estate is a place where your property goes. Now you dont lose any of your property out of your home, nor does it get taken away from you, but effectively all of your property goes into this estate, and then certain property is exempt and certain property is not exempt.
I do not say any of this to confuse you but you have to understand that the bankruptcy laws are all governed by laws and its technical and you need an attorney to help you and guide you through the process. So come in and see us. Most of my clients do not lose anything in a Chapter 7 bankruptcy.
However, I have seen many clients who have used the wrong attorney or a paralegal or tried to do it on their own and they have not been informed and educated as to what they can keep, and they have lost assets.
Give us a call. 520-318-3200.
We look forward to seeing you in the office.
Discrimination Laws And Bankruptcy
As mentioned above, federal law prohibits both government and private-sector employers from discriminating against employees who have filed for bankruptcy protection.
The laws that prohibit discrimination against debtors who have filed bankruptcy are found in the U.S. Bankruptcy Code, which is the federal law that oversees bankruptcy proceedings.
against potential employees or employees on the basis of being a debtor.
In other words, federal, state, and local government agencies cannot refuse to hire, fire, or otherwise discriminate against people who file for bankruptcy.
Section 525 of the Bankruptcy Code uses slightly different language when it addresses private-sector employers. It says that private-sector employers are prohibited from:
against employees on the basis of being a debtor.
Notably, the language that prohibits denying debtors employment is not included. Case law has interpreted this omission as intentional, and courts have held that private employers are permitted to deny employment to job applicants who have filed for bankruptcy, but not fire or otherwise discriminate against these individuals.
If You Use A Company Credit Card
If the statement goes directly to your employer and your employer is responsible for payments, you should be able to keep your company credit card after bankruptcy. However, if youve used the card for personal purchases or are liable for the balance, its more likely your company will be notified and take action.
If youre not sure about liability, talk to your human resources department and your attorney.
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Reasons To Consider Filing For Bankruptcy
Surveys agree that job loss and medical debt are the two biggest reasons for considering bankruptcy. Many times, the two team up and light a torch to a familys financial plans.
Health problems can make it difficult or even impossible to do your job. The result is you either quit or are let go by the company. That is a toxic combination because you lose your source of income at precisely the same time expenses go up.
There are some other, less imposing situations that could cause you to consider bankruptcy. You might be headed down that road if:
- You are getting a divorce
- The home you own is under water and in danger of foreclosure
- The only way you can pay for things is using a credit card
- You use one credit card to pay off another
- You are considering withdrawing money from a 401 account to pay bills
Circumstances Where An Employer Will Receive Official Notice:
There are three main scenarios when your employer will receive notice that you have filed a bankruptcy case. This will happen if the bankruptcy filing is stopping a wage garnishment if you owe money to your employer and have to list them as a creditor or if you are filing a Chapter 13 case which requires a payroll deduction order for plan payments.
Stopping a wage garnishment
You might decide to file a bankruptcy specifically to stop a wage garnishment. A wage garnishment occurs after a creditor has filed a lawsuit against you to collect the money you owe. Most often creditors will receive a judgment against you because you did not respond to the lawsuit. If you do not respond within a certain time period, the judge will enter a default judgment against you. Once a judgment is entered, your creditor can serve it on your payroll department so that they can get money from your paycheck before you even see it. This can result in you not having enough money in your paycheck to keep up with expenses.
When you file a bankruptcy case an automatic stay goes into effect immediately, which freezes certain legal proceedings. Your wage garnishment will stop. Your payroll department has to receive notice of your case in order to do so. It can vary by employer whether others in the company are informed.
If you owe your employer money and have to list them as a creditor
Chapter 13 payroll deduction order
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At Bond & Botes, we now offer full service bankruptcy consultation and filing over the phone or by video from the comfort and safety of your home or office. Please call or to setup your free phone or video consultation.
Preferences Or Transfers At Undervalue
A transfer of property can be set aside if, in the three months prior to the date of the initial bankruptcy event, the debtor made a payment to one creditor that favored the creditor over others. .
A disposition of property or provision of service for which no consideration is received by the debtor or the consideration received is less than the fair market value of the consideration by the debtor can be set aside if made in the one year before the initial bankruptcy event. If the creditor is not at arms length from the debtor, the disposition of property can be reviewed by up to 5 years before the initial bankruptcy event if the debtor was insolvent or was rendered insolvent by the transaction or the debtor intended to defraud, defeat or delay a creditor.
If you have reasonable grounds to believe that the bankrupt or someone else is guilty of an offence under the BIA or any other statute, you should contact the LIT in charge of the estate or the OSB.
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Can My Employer Fire Me For Declaring Bankruptcy Will I Lose My Job
Wednesday, November 4th, 2009
Federal law requires that no private or government employer fire you because you have filed for bankruptcy. If a government or private employer violates federal law against bankruptcy discrimination and fires you anyway, you can sue them in state court or federal bankruptcy court. Additionally, government employers are prohibited from considering your bankruptcy filing when you apply for a job, although unfortunately, private employers can. If a private employer denies your job application , you probably have little recourse. Fortunately, many employers do not consider credit when making employment decisions, and government employers are prohibited from doing so.
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What Are The Upsides Of Filing Chapter 7 Bankruptcy
Immediate relief in the form of a much-needed breathing spell.
The moment your case is filed with the bankruptcy court, youâre protected from creditors. Filing bankruptcy triggers an automatic stay – or stop – on all collection actions. This means all phone calls, garnishments, and collection letters have to stop. It even put at least a temporary stop to repossessions, evictions, and foreclosures.
Permanent debt relief in the form of a bankruptcy discharge.
Filing Chapter 7 bankruptcy wipes out most types of debt, including credit card debt, medical bills, and personal loans. Your obligation to pay these types of unsecured debt is eliminated when the bankruptcy court grants you a bankruptcy discharge.
Getting your bankruptcy discharge is virtually guaranteed.
If youâve never filed bankruptcy before, pass the means test, and are honest in your dealings with the bankruptcy court and the bankruptcy trustee, you can get your bankruptcy discharge in as little as 3 months. As long as you make sure you meet all requirements before and after filing your bankruptcy case, itâs basically automatic.
Youâll probably get to keep all of your stuff.
If you want, you can even keep your car after filing bankruptcy.
After filing bankruptcy, missed monthly payments and other negative marks on your credit report no longer hurt your credit score.
You’ll have better access to credit and banking.
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Differences Between Chapter 7 And Chapter 13 Bankruptcy
There is more than one process whereby you can file for bankruptcy. The two types people most favor are Chapter 7 bankruptcy and Chapter 13 bankruptcy. The type of bankruptcy also affects what items may be kept or taken from you.
A chapter 7 bankruptcy enables you to legally discharge, or no longer be liable for, most debt that you owed as of the date you filed for the bankruptcy. This process takes about three months after you file the bankruptcy petition. You could lose some of your property by taking this route. If you had transferred property before filing for bankruptcy, the transfer may be reversed to you.
A chapter 13 bankruptcy enables you to enter into a payment plan to pay off your debt over a three-to-five-year period. Congress has even extended the plan period to seven years, with some exceptions, as a result of the covid crisis. This process protects your property and prevents wage garnishment, and you are able to pay back your outstanding debt through your payment plan. You have to make a payment out of your disposable income every month.
What Other Assets Are Classified As Exempt Or Non
In summary, assets are unique to each individual, and exemptions are applied to avoid undue hardship.
Understanding the BC Bankruptcy Exemptions is an important part of choosing which debt solution is appropriate for you. The exemptions are also vitally important in calculating what is the proper amount to offer in a Consumer Proposal.
For a more thorough review of your debt situation and which exemptions may apply, please contact us to set up a complimentary, confidential assessment. We have decades of experience and will provide you with information on practical options to help you get relief from your debt.
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Bankruptcy Will Not Impact Your Spouse Or Partner Unless You Have Joint Debt
If you file for bankruptcy, it only impacts your partner if your bankruptcy filing includes debts youve both co-signed on . In that case, your partner is responsible for those debts, even if you have filed for bankruptcy. If co-signed loans are too much for your partner to manage alone, speak with an LIT to discuss debt relief options, like a consumer proposal, debt consolidation, or, in extreme situations, bankruptcy.
Do You Lose Your Car If You File For Bankruptcy
Believe it or not, some people want to lose their homes or cars in bankruptcy. They are upside down on their mortgage or car loans. If they tried to sell their home or car to get out from under the death, they would have to pay money to get rid of the property.
Through a Chapter 7 bankruptcy case, they can surrender the home or car to the creditor without fear of a deficiency judgment. They will not have to pay one more cent on the loan, regardless of how much money is owed on the account after the home or car is liquidated .
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Check What You Can Keep
There are some belongings the official receiver cant sell. Theyre called exempt belongings.
You can usually keep the following items:
- household equipment, such as a cooker
- tools and equipment for your job – if you use them yourself rather than lend them to someone else
- a car or other vehicle you need for work or your basic needs – for example, if youre disabled and cant go anywhere without a car
- a car or other vehicle you need to care for a dependant
- other belongings that are necessary for your basic family needs
If youre still paying for something on hire purchase, the official receiver might sell it – even if it would usually be exempt. If youre not sure something is hire purchase, check if the loan agreement includes the words hire purchase.
The official receiver might also sell something exempt if its valuable. Theyll only sell it if theyd get enough money to replace it with something cheaper and have money left over to pay your creditors.. For example, if they sell an expensive car theyll give you £1,250 to buy another car and use the rest of the money to pay your creditors.
The official receiver can sell items which aren’t needed for your job or your basic home needs. This includes:
If someone will buy your belongings for you, tell the official receiver. Theyll usually agree if the person pays what the belongings are worth.