Bankruptcy: What You Need to Know
Bankruptcy has been around since the days of Ancient Greece and Rome when debtors were taken captive until they could pay back their loans. Nowadays, it serves as a legal procedure that provides businesses or individuals with the means to get rid of their debts in full.
When you are mired in debt and struggling to make ends meet, bankruptcy can be a lifesaver. It is an invaluable legal option that has been created by the federal government to give individuals and businesses a new beginning. Bankruptcy offers hope for those seeking ways to better manage their finances and take back control of their lives so they can start fresh on solid financial footing.
At Century Credit Processing Group, our team of knowledgeable professionals is here to help you tackle Debt Relief Services such as credit counseling, consolidation, and bankruptcy. We understand the daunting nature of filing for bankruptcy can be confusing and overwhelming - that's why we are available to answer any questions or concerns you may have about the process at 310-728-9741. Our goal is always to find a solution that works best for your individual financial situation so doesn't hesitate in reaching out today!
Who Can Declare Bankruptcy?
If people or businesses can't pay their debts, they may be able to declare bankruptcy. However, individuals must obey specific regulations established by bankruptcy laws – such as completing a means test that verifies if they have enough income to remunerate all of their debtors. By and large, those with low earnings and extensive unsecured credit obligations stand the most chance of achieving success from filing for bankruptcy relief.
As a final resort, companies may choose to declare bankruptcy under different chapters of the federal bankruptcy code depending on their financial status and form. However, before opting for such an extreme measure, it is best if they consider other alternatives such as consolidation or mediation with creditors.
Are All Debts Forgiven When You Declare Bankruptcy?
The type of bankruptcy filing and the debtor's particular circumstances determine what debts may be written off in a bankruptcy. Generally, unsecured debt such as medical bills, Credit Card Payments, and personal loans can typically be absolved through a bankruptcy claim; however, secured debts like mortgages or car finance are not usually terminable unless the collateral is given up by the borrower.
If you have debts such as taxes or student loans, it may be possible to eliminate them during bankruptcy--but only if strict legal requirements are met. To find out which of your debts can potentially be discharged in your particular case, consulting with a bankruptcy attorney is the best option.
Types of Bankruptcy
When it comes to bankruptcy, there are three possible options: Chapter 7, 13, and 11. Each chapter allows for different advantages and obligations based on your financial state of affairs and desired outcomes; you'll need to carefully assess which type is the most suitable for yourself before deciding which one to pursue.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy, sometimes referred to as liquidation bankruptcy, is the ideal option for those who are unable to pay their debts and lack substantial assets. A trustee will be selected to convert non-exempt possessions into cash that can then be used by creditors. This process provides an opportunity for a fresh financial start while providing some relief from overwhelming debt obligations.
You need to pass the means test in order to become eligible for Chapter 7 Bankruptcy. In the case you make less than the median salary, you will be instantly qualified for this kind of bankruptcy; however, if it's higher than that amount, then a more thorough assessment must be conducted including an evaluation of both financial resources and expenses.
Process and Timeline:
The whole Chapter 7 bankruptcy process can take anywhere from three to six months, but it all starts with a debtor filing the petition through their local court. Along with that paperwork, they must also supply details on their income sources and expenses, as well as asset and debt information. As soon as this is done, an automatic stay comes into effect - which essentially puts a halt on any collection attempts by creditors until everything has been resolved.
The bankruptcy trustee shall assess the debtor's financial information to identify which assets are exempt from Liquidation. These include a primary residence, car, and personal possessions. Other non-exempt assets will be sold off, with proceeds handed out among creditors.
Pros and Cons:
Chapter 7 bankruptcy is a great option for those looking to rid themselves of unsecured debt such as medical bills and credit card payments. However, it's important to note that the debtor will have to surrender any assets they consider non-exempt. Additionally, their credit report will reflect this filing for ten years afterward.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy can help those with a steady income to restructure their debt, enabling them to pay back creditors in reasonable installments. It is also known as reorganization bankruptcy since it offers individuals the opportunity to create a proposed plan that reflects their personal financial situation.
Are you in need of financial assistance and are considering filing for Chapter 13 bankruptcy? Before you can do so, make sure that your regular income is sufficient to cover the amount of unsecured or secured debts owed. Additionally, be aware that a credit counseling class must also be completed prior to submitting a request for Bankruptcy Protection.
Process and Timeline:
Ready to start a new financial chapter? The Chapter 13 bankruptcy process is the perfect way to do that. This typically 3-5 year journey begins when you file your petition and proposed repayment plan with the court while providing important information regarding income, expenses, assets, and debts. As soon as this document is submitted an automatic stay will be enacted immediately halting all creditor collection efforts. With Chapter 13 now in motion you can finally begin taking control of your finances!
The trustee assigned to the bankruptcy case is responsible for verifying that the Repayment Plan proposed by the debtor is viable and making any necessary adjustments. Then, on a monthly basis, payments must be made directly to this individual who will distribute it among those creditors affected by the proposal in accordance with its terms. Finally, once all outstanding unsecured debts have been settled at the completion of said arrangement they shall no longer be held against them.
Pros and Cons:
Chapter 13 bankruptcy offers numerous benefits -- including the ability for debtors to retain their assets while paying off their debts over time, a halt of foreclosure proceedings, and even the opportunity to get caught up on missed mortgage payments. However, those who opt for this form of relief must commit to making monthly repayments toward their payment plan over several years in order for it to be successful.
Chapter 11 Bankruptcy
Bankruptcy under Chapter 11 of the bankruptcy code is specifically tailored to those with overwhelming debt. Referred to as reorganization bankruptcy, it permits the debtor to reshape their obligations and operations in order to attain financial stability.
To take advantage of the benefits offered by Chapter 11 Bankruptcy, Debtors must be either a business or persons with an overwhelming amount of debt. Prior to filing for bankruptcy, these individuals are required to participate in credit counseling sessions.
Process and Timeline:
The Chapter 11 bankruptcy process can be complex and lengthy, often taking several years to complete. The process begins when the debtor files a bankruptcy petition with the bankruptcy court, along with a proposed Reorganization Plan. The debtor must also provide information about their income, expenses, assets, and debts. An automatic stay is put in place, which stops all collection efforts by creditors.
The bankruptcy trustee will carefully analyze the proposed reorganization plan and apply any appropriate changes. Then, it is up to the debtor to put these alterations into motion while making consistent payments toward their debt each month. Furthermore, they are allowed to remain in operation throughout this period of restructuring.
Pros and Cons:
Chapter 11 bankruptcy provides businesses and people with a considerable amount of debt the opportunity to restructure their finances, enabling them to become financially viable again. Nevertheless, this process is not always straightforward nor expeditious; it entails prompt payments on behalf of the debtor for an extended period of time.
How Century Credit Group Can Help
Are you or your business in a financial bind? Let Century Credit Processing Group help. We can decide if Chapter 7, 11, or 13 of bankruptcy is the ideal option for resolving your money woes. Plus, we'll prepare the necessary petition and connect you with experienced legal counsel as well as Credit Counseling to assist in rebuilding credit after bankruptcy. Don't let debt drag down your future - take control today with Century Credit Processing Group!
Bankruptcy and Your Credit Score
Declaring bankruptcy is a legal process to either pay off or erase your debts under the protection of certain laws. While this may be able to offer financial freedom, it can also have damaging implications on your credit score. In other words, while you get a chance at starting anew with bankruptcy, it's important to understand that there could be serious consequences as well.
How Bankruptcy Affects Your Credit Score
Filing for bankruptcy has the potential to damage your credit score and hamper any future attempts at securing credit, as its effects can stay on your report for an extended period - up to ten years in some cases. This information is invariably negative and could cause a decline of several points within your existing rating.
In addition, your capacity to acquire a Loan or Credit card may be hindered if you've filed for bankruptcy since lending entities tend to consider you a risky borrower. This makes it difficult for people with such bankruptcy filings to get access to credit and, when they do, the rates of interest are usually higher than usual.
Rebuilding Your Credit After Bankruptcy
Reestablishing credit after bankruptcy may take some time and dedication, but it's not an impossible task. A great place to begin is by creating a budget that enables you to pay off any unpaid debts; this shows creditors that you are taking initiative in bettering your financial standings. To raise your credit score after bankruptcy, a great step is to obtain a secured credit card. This sort of card needs you to put down money as collateral in case you can't afford the payments. When applied judiciously and timely repayments are made, utilizing this kind of card will help reconstruct your credit quickly!
At Century Credit Processing Group, we are dedicated to providing the most effective Credit Repair Services. Our team can assist you in boosting your credit score by recognizing errors on your report, challenging false data, and bargaining with creditors for eliminating unfavorable items from your account. With our help, you’ll be able to receive financial freedom quickly!
Ultimately, bankruptcy can be damaging to your credit score, however, you are able to restore it gradually. With a budget plan in place, by obtaining a secured credit card and with the help of professional services like Century Credit Processing Group repair company, you will have taken the first step towards improving your score and gaining back financial autonomy.
Alternatives to Bankruptcy
Debt consolidation is a debt relief option that involves combining multiple debts into a single payment. A debt consolidation loan can help you pay off your outstanding debts and improve your credit score. With a debt consolidation loan, you can lower your interest rate and have a fixed payment amount each month. This can help you save money in the long run and help you manage your debts more effectively.
If financial difficulty has overwhelmed you and bankruptcy seems unavoidable, Debt Settlement could be a viable solution for alleviating your debts. This form of debt relief reduces the amount owed to creditors by negotiating with them; it is particularly conducive to those struggling with credit card debt or medical bills. It's important to note that while settling your debts can provide significant respite, it may affect your credit score adversely - so ensure all other options have been thoroughly explored first!
If you're having trouble managing your debts, credit counseling can be an effective solution. A certified credit counselor will work with you to build a budget and repayment plan that fits within your financial reality. The process of talking through your finances can help bring clarity and understanding to the situation, allowing for better decision-making when it comes time to pay off these obligations. With their guidance, you'll be one step closer to getting back on track with debt management.
At Century Credit Processing Group, we recognize that bankruptcy may not be an ideal solution for everyone. That's why we are proud to present a selection of alternative debt relief solutions to help you move forward. Our team of experienced financial advisors will take the time to analyze your current situation and create customized plans tailored specifically for you. Whether it is debt consolidation, credit counseling, or debt settlement services, our specialists can find the best possible answer for your individual case.
Legal Representation in Bankruptcy
Importance of Hiring an Attorney for Bankruptcy Proceedings
Bankruptcy proceedings can be daunting, but having a bankruptcy lawyer on your side will provide much-needed support. An expert in the field of bankruptcy law can guide you through the intricacies of filing and ensure that all legal requirements are taken care of. Moreover, an experienced attorney can help protect your assets while explaining to you what options are available during such a difficult period.
At Century Credit Processing Group, we understand the value of proper Legal Representation for a bankruptcy filing. For that reason, we partner with a vast network of experienced attorneys who are dedicated to guiding you through the process with utmost care and efficiency. Our team can provide you with the most suitable lawyer for your case--one devoted to preserving your rights during proceedings and securing an ideal resolution from start to finish.
Steps for Filing Bankruptcy
Filing for bankruptcy can be a complex and confusing process, with multiple steps to complete. To make it easier on yourself, let's break down each procedure in this article - guaranteeing you a stress-free experience.
Determine the Type of Bankruptcy to File
Knowing which type of bankruptcy you choose to file is essential. Chapter 7 bankruptcy is intended for those who cannot repay their liabilities and have no assets, while Chapter 11 helps with business reorganization. Lastly, if you can keep up with an income flow but need help repaying your debts, then Chapter 13 may be the right fit for you.
Complete Credit Counseling
Prior to petitioning for bankruptcy, you must attend a Credit Counseling Session from an authorized agency. This meeting is designed to aid you in assessing your finances and comprehending solutions other than filing for bankruptcy. Upon concluding the session, you will be granted a certificate of completion.
File Bankruptcy Petition
After you have successfully finished the credit counseling session, filing for bankruptcy is your next step. You must submit all necessary forms to the court, pay a filing fee and provide any other documents as requested.
Attend the Meeting of Creditors
Upon the processing of your bankruptcy, you will be summoned to a meeting with creditors. This is where the Bankruptcy Trustee (whose role it is to vet and verify all information) shall question you about your finances, assets, and debts; requiring sworn answers from you in an oath-taking ceremony.
Complete Bankruptcy Course
Following the creditors' meeting, you must partake in a debtor education course from an authorized organization. This program is designed to educate you on how to wisely manage your finances and Debt Obligations. Upon finishing the seminar, you will receive a certificate that confirms the successful completion of the class.
Receive Discharge of Debts
After you complete the bankruptcy course, all that's left is to await your discharge order. As soon as it arrives and your unsecured debts are absolved, you can start anew by rebuilding your credit status. It is essential for you to bear in mind that not every debt will be exempted from bankruptcy, so it's possible that a few may still need payment from you. So you see, filing for bankruptcy is a complex process that involves several steps. It is crucial to understand the steps involved to ensure a successful bankruptcy filing. If you are confused about how to go about it, you can reach out to us at Century Credit Processing Group. We will file bankruptcy on your behalf and see that it's done properly.
Understanding Bankruptcy and Its Procedures
Considering bankruptcy? Century Credit Processing Group can provide a helping hand and help you understand the process.
When an individual or business files for bankruptcy, creditors are restrained from taking any action against your assets due to an automatic stay being in place - this is followed by filing a plan of reorganization with the court which details how debts will be repaid. After obtaining approval from the court, payments are made through a trustee who disperses them amongst creditors; once all required payments have been satisfied, debts get discharged and the case gets closed!
Starting a Bankruptcy Case
When facing financial hardship and seeking bankruptcy relief, individuals must initiate the process by submitting a petition to the court. This includes providing an extensive list of creditors, a detailed record of assets and liabilities, as well as financial statements. The court then assigns a trustee who is responsible for collecting any non-exempt property belonging to the debtor while also investigating their finances thoroughly.
The Bankruptcy Code provides numerous options for those seeking relief from debt, including Chapter Seven which liquidates assets to pay creditors, and Chapter Thirteen which creates an approved repayment plan by the court. Businesses have access to a special type of bankruptcy as well: Chapter Eleven, which is available for businesses looking to reorganize their operations and develop an Accepted Payment Scheme.
Struggling with bankruptcy law? Century Credit Processing Group has got you covered! Our experienced and knowledgeable team can provide the help you need to get through this tough time. Call us today at 310-728-9741 for a free consultation.
Is it Wise to Hire a Bankruptcy Lawyer?
Filing for bankruptcy is a complicated process, and it's best to have an experienced lawyer by your side. A skilled bankruptcy attorney can evaluate the details of your financial situation, explain all the legal possibilities available to you, and guide you toward the solution that'll be most beneficial in your circumstances. Don't take on this challenge alone--hiring a knowledgeable lawyer will provide invaluable assistance as you navigate through difficult times.
When you Hire a Lawyer, not only do you get expert legal representation in court and assistance filling out the paperwork, but they can also negotiate with creditors to protect your rights. Avoiding costly mistakes is invaluable during bankruptcy proceedings - with their guidance and support throughout the process, you'll have peace of mind knowing that everything will be taken care of properly.
At Century Credit Processing Group, we can help you file for bankruptcy and educate you on what's best for you. So, don't hesitate to call us at 310-728-9741 to book an appointment!
Is it better to file Chapter 7 or 13? ›
You may like to file Chapter 13 instead of a Chapter 7 bankruptcy, if you're behind on your mortgage payments and you're trying to save your home. Chapter 7 does not give you the opportunity to catch up mortgage payments or otherwise save your house. A Chapter 13 would be the appropriate chapter to file for that.How do you counter bankruptcy? ›
- Maintaining a Cash-Flow Balance. ...
- Making Decisions Based on a Business Plan. ...
- Opting for a Change of Management. ...
- Keeping Accurate Financial Reports. ...
- Maintaining Good Relationships with Creditors. ...
- Considering Other Legal Alternatives. ...
- Reaching Out to Financial and Legal Professionals.
Filing a Chapter 13 petition suspends pending foreclosures and payments of any other debts owed. This gives you relief from creditors while the court considers the plan, but it does not eliminate the debt.What debts are discharged in Chapter 13? ›
Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property (as opposed to a person), debts incurred to pay nondischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings.Why do most Chapter 13 bankruptcies fail? ›
In most cases, failure is due to one of several reasons: Life circumstances. Not having the guidance of an experienced bankruptcy attorney. Over-ambition.What percentage of Chapter 13 bankruptcies are successful? ›
Chapter 13 Has a Failure Rate of 67%
Why do roughly 2 out of every 3 Chapter 13 cases fail? Well, to get a discharge of your debts, you need to complete a 3-5 year repayment plan. And most plans are 5 years long. Only at the end of the plan will the remainder of some debts be forgiven.
- credit card debt.
- medical bills.
- personal loans and other unsecured debt.
- unpaid utilities.
- phone bills.
- your personal liability on secured debts, like car loans (if there's no reaffirmation agreement)
- deficiency balances after a repossession or foreclosure.
Bankruptcies: 7 years for completed Chapter 13 bankruptcies and 10 years for Chapter 7 bankruptcies. Foreclosures: 7 years. Collections: About 7 years.Can bankruptcy be removed at any time? ›
Yes, you can remove a bankruptcy from your credit report under the right circumstances. Bankruptcy can stay on your credit report for between seven and ten years. This timeline is similar to how long negative information generally stays on your credit (about seven years).What will I lose in Chapter 13? ›
A Chapter 13 bankruptcy can remain on your credit report for up to 10 years, and you will lose all your credit cards. Bankruptcy also makes it nearly impossible to get a mortgage if you don't already have one.
What is the average monthly payment for Chapter 13? ›
A Chapter 13 petition for bankruptcy will likely necessitate a $500 to $600 monthly payment, especially for debtors paying at least one automobile through the payment plan. However, since the bankruptcy court will consider a large number of factors, this estimate could vary greatly.How much will my credit score go up after Chapter 13? ›
According to FICO, your recent payment history has the biggest impact on your credit score, comprising 35% of your credit score. Based on an improved debt-to-income ratio and restored timely payments to creditors, 65% of your credit score factors are improved through filing Chapter 13 bankruptcy.What is the lowest payment on Chapter 13? ›
The Minimum Percentage of Debt Repayments In A Chapter 13 Bankruptcy Is 8 To 10 Percent.Is it a good idea to get Chapter 13? ›
In most cases, paying off Chapter 13 early isn't a good idea. By paying off Chapter 13 early, you're required to repay 100 percent of the debt you owe to your creditors instead of the reduced amount.Do you get money back after Chapter 13? ›
If you are due a refund in your case, any refund will usually be issued mid-month following the completion of the case. Therefore, it is important that you keep your address current with your attorney and the Bankruptcy Court so that you can receive important documents and any refund at the completion of your case.How many payments can you miss in Chapter 13? ›
At the same time, very few bankruptcy trustees are going to file a motion to dismiss against you over a single late payment. As a general rule, it takes two or three missed payments before action is taken to default a Chapter 13 bankruptcy plan. Still, you cannot guarantee that you will have that much time to act.Does Chapter 13 hurt you? ›
Although a Chapter 13 bankruptcy stays on your record for years, missed debt payments, defaults, repossessions, and lawsuits will also hurt your credit and may be more complicated to explain to a future lender than bankruptcy.Do you lose everything in Chapter 13? ›
You don't have to pay unsecured debts in full. Instead, you pay all your disposable income toward the debt during your three-year or five-year repayment plan. The unsecured creditors must receive as much as they would have if you'd filed Chapter 7.How long does it take to clear Chapter 13? ›
Chapter 13 bankruptcy typically takes three to five years. During that time, you'll be on a repayment plan to repay some or a portion of your debts.Do you pay 100% in a Chapter 13? ›
Often, those individuals or married couples can still file for Chapter 13 bankruptcy, but will be required to pay 100% of their unsecured debts through the plan. If you're wondering why you would bother to file Chapter 13 if you're going to have to pay all of your debts anyway, you're not alone.
What are the worst bankruptcies? ›
The largest bankruptcy in U.S. history occurred on September 15, 2008, when Lehman Brothers Holdings Inc. filed for Chapter 11 protection with more than $639 billion in assets. Lehman Brothers Holdings, Inc. Worldcom, Inc.
No matter which form of bankruptcy is sought, not all debt can be wiped out through a bankruptcy case. Taxes, spousal support, child support, alimony, and government-funded or backed student loans are some types of debt you will not be able to discharge in bankruptcy.What debt is not bankruptable? ›
Types of debt that cannot be discharged in bankruptcy include alimony, child support, and certain unpaid taxes. Other types of debt that cannot be alleviated in bankruptcy include debts for willful and malicious injury to another person or property.Which bankruptcy wipes out all debt? ›
Chapter 7 bankruptcy: It can wipe out certain debts within several months, but a court-appointed trustee can sell your nonexempt property to pay your creditors. You must have a low income to qualify.Can you live a normal life after bankruptcies? ›
There will be hardships you'll have to endure — from cash flow management to establishing good credit and rebuilding your financial profile — but it's possible to financially recover from bankruptcy and give yourself a fresh start.Is it smart to claim bankruptcies? ›
Filing for bankruptcy can cause significant harm to your credit history, however it can be the best solution for managing debt that you can't afford to pay. Consider consulting with a reputable credit counselor to explain all your options for repayment before you file for bankruptcy.Why do bankruptcies get dismissed? ›
Dismissal of a Bankruptcy Case – Dismissal ordinarily means that the court stopped all proceedings in the main bankruptcy case AND in all adversary proceedings, and a discharge order was not entered. Dismissal can occur because a debtor requested the dismissal and qualifies for voluntary dismissal.Can bankruptcy wipe out a Judgement? ›
Filing for Chapter 7 bankruptcy stops collection efforts against you. In most cases, it renders judgments null and void. This means anything that happened as a result of the judgment must stop, including asset seizures, unless it was linked to a debt that's not dischargeable, such as child support or alimony payments.Does credit score go up when bankruptcy is removed? ›
Your credit scores may improve when your bankruptcy is removed from your credit report, but you'll need to request a new credit score after its removal in order to see any impact. Credit scores are not included in credit reports. Rather, scores reflect what is in your credit report at the time the score is calculated.What is a good credit score? ›
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
What is the downside of Chapter 7? ›
The main cons to Chapter 7 bankruptcy are that most unsecured debts won't be erased, you may lose nonexempt property, and your credit score will likely take a temporary hit. While a successful bankruptcy filing can give you a fresh start, it's important to do your research before deciding what's right for you.How much do creditors get in Chapter 7? ›
In Chapter 7 cases filed by consumers, unsecured creditors usually get nothing. Typically, the state's property exemptions are high enough to protect all of the assets a filer wishes to keep.When should you consider Chapter 7? ›
“You may consider Chapter 7 if creditors are harassing you, garnishing your wages and bank accounts and you have no way to pay off the debts. You may consider Chapter 7 as a last resort after your best efforts to pay your debts fail.”Is Chapter 7 a good option? ›
The undeniable upside to filing for Chapter 7 bankruptcy is the debt relief it provides. It has the power to lift a major burden off your shoulders in just a few months. Most unsecured debt can be discharged, including credit cards, medical bills, and personal loans.What assets do you lose in Chapter 7? ›
- Additional home or residential property that is not your primary residence.
- Investments that are not part of your retirement accounts.
- An expensive vehicle(s) not covered by bankruptcy exemptions.
- High-priced collectibles.
- Luxury items.
- Expensive clothing and jewelry.
The court may deny a chapter 7 discharge for any of the reasons described in section 727(a) of the Bankruptcy Code, including failure to provide requested tax documents; failure to complete a course on personal financial management; transfer or concealment of property with intent to hinder, delay, or defraud creditors; ...Does Chapter 7 hurt your credit? ›
Filing for bankruptcy can hurt an individual's credit, and the impact can last for years. A Chapter 7 bankruptcy may stay on credit reports for 10 years from the filing date, while a Chapter 13 bankruptcy generally remains for seven years from the filing date.What do you have to give up in Chapter 7? ›
Most Chapter 7 bankruptcy cases are no-asset cases. That means the debtors give up nothing to the trustee. The exemption systems permit debtors to retain the means of day-to-day living, free from the claims of their creditors.How long does it take from start to finish on Chapter 7? ›
Chapter 7 bankruptcy generally takes between four and six months to complete, but there are some scenarios that may make the process longer: More information is needed. Your trustee may submit a request for more information than what you provided, which could delay your case.Can you keep your tax refund after filing Chapter 7? ›
The good news is that you only lose the tax refund once, since any refund on income earned after a Chapter 7 bankruptcy belongs to you. With Chapter 13, you keep your assets, and you, the court, the trustee and your creditors agree to a repayment plan based on your monthly income.
Can I save money while in Chapter 7? ›
Spending Money While You're in Chapter 7
Spend, save, or invest it – the Chapter 7 Trustee has no right to take the money or question what you do with it.
The median income information is used by the bankruptcy court when determining whether or not an individual qualifies for relief under chapter 7 of the Bankruptcy Code, and also is used in determining the applicable commitment period for payment plans filed under chapter 13.Do creditors get mad when you file Chapter 7? ›
They don't get mad when they get your bankruptcy filing and they don't cry when they get your bankruptcy filing. Instead, they process the bankruptcy notice along with the thousands of others they get each year without an ounce of emotion about it.