Frequently Asked Questions about Bankruptcy

How long will a bankruptcy remain on my credit report?

All entries on a credit report remain there for between 7 and 10 years, depending upon the reporting agency.

Is it possible to clean up my credit report?

Yes and no. You can remove false information and correct errors on your report. You cannot, however, remove information which is true or factual.

The credit card company has offered to cut my bill in half if I can pay in one lump sum. Should I?

If you are financially able, it is a good deal. Just be aware that any amount that the credit card company write's off is considered, by the IRS, to be debt forgiveness by the credit card company. That amount must be added to your income and tax paid. The only way to avoid that result is through a discharge of the debt in bankruptcy.

I don't want to NOT pay my debts, I just need time to pay them without the threats and calls. What can I do?

In many situations, Chapter 13 can enable you to pay your debts in full. It all depends upon how much you will have available to pay each month into your Chapter 13 plan. In most situations, interest stops on your credit card obligations, removing one big chunk of the monthly debt.

I owe back taxes to the IRS. Can bankruptcy help me?

In most situations, IRS taxes are not dischargeable in bankruptcy. Certain older IRS taxes may be dischargeable in whole or in part, depending on the status of liens and your assets. Chapter 13 can be used to pay out the IRS without fear of garnishment of wages or seizure of assets, sometimes without interest.

My house has been posted for foreclosed on the first Tuesday of next month. What can Bankruptcy do?

A Bankruptcy filing will stop the foreclosure. Chapter 7 will give you a short amount of time to cure the default before re-posting of the property. Chapter 13 will enable you to propose a plan to repay your arrearage and keep the house.