Q. I made a settlement with one of my creditors to pay off a card for less than what I owed in a lump sum is there anything I should be worried about?
A. Yes, for one the creditor can send you a 1099 form and say the forgiven debt is income AND the creditor can also place a settlement notation on the account in your credit report thereby decreasing your score.
Q. I was laid off and have been out of work for a year. It’s reached a point where I can’t pay my bills, and I’m considering filing for bankruptcy. What should I know before making a decision?
A. You should know what your income is per month, the number of persons in your household, what kind of and how much debt you have, what your monthly expenses are, and a clear list of all your assets.
What are the consequences of filing a bankruptcy petition? The filing will remain on your credit report for 8 years just as any other negative item.
What must I do BEFORE I file for bankruptcy?
A. Consult with an attorney; gather necessary documents my attorney has requested.
How do I protect property that is collateral for one of my secured debts from being repossessed?
A. This depends on the chapter in bankruptcy you file Chapter 7 or Chapter 13 and if you are behind on payments. If you are current on payments then the property should not be taken back by the creditor in a chapter 7. In a chapter 13, the payment plan can be structured to include arrearages.
Q. What can I do if a creditor continues to try to collect on a debt that I owe after I have filed my bankruptcy petition and where the automatic stay applies?
A. Notify your Attorney, if a creditor violates the automatic stay they could face major penalties and fines from the bankruptcy court.
If I file for bankruptcy, will I still owe child support?
A. Yes domestic support obligations are not dischargeable in bankruptcy.
How do I know if a debt is secured, unsecured, priority, or administrative, so I can fill out my schedules correctly? An attorney can assist you with the classification of your debts.
A. For example a mortgage on a residence would be a secure debt. Priority debt is tax debt and other domestic support obligations. Unsecure debt is any other debt such as unpaid medical bills, credit cards, lines of credit.
Q.How long is my payment plan in a chapter 13? It can be anywhere from three to five years. Does it depend on the types of debt and how much? Yes secure debts and priority debts are paid even after the plan ends where the unsecure debts are paid until the end of the plan in a chapter 13 bankruptcy
Q. How do I pay my debts under the repayment plan?
A. A primary mortgage and priority arrearages are paid through the trustee the remaining creditors are paid directly by the debtor according to the chapter 13 plan.
If I file for bankruptcy, will I still owe alimony?
Q. How many years will a bankruptcy show on my credit report?
A. Eight years like any other negative item