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Bankruptcy - Chapter 7 - Life After Discharge

Bankruptcy - Chapter 7 - Life after Discharge

BANKRUPTCY:  Life After Discharge: What happens?

Q: I filed a Chapter 7 Bankruptcy case within the last 8 years, but again or still have debt I need help with. What can I do?

A. You may still be able to get some form of help or relief from bankruptcy proceedings. Here are a few things that may help you:

•i. If you did not receive a discharge of your debts in the prior case, you should be able to file either a Chapter 7 or a Chapter 13 Bankruptcy case;

•ii. Check the date of filing of the prior bankruptcy case. The measuring time period is from the date of filing of the prior bankruptcy case to the date of filing of the new bankruptcy case; and,

•iii. You can file a Chapter 13 Bankruptcy case if you otherwise meet the qualifications for filing a Chapter 13 case. You might also be able to file a Chapter 11 case although that may be too expensive to be practical.

Q. I did not complete the post-bankruptcy filing financial management course in time, and my case was dismissed. Is there anything I can do?

A. Yes. You can file a Motion to Re-open the Case to file the required Certificate of Completion. However, you will have to pay a filing fee which is almost equal to the cost of the original filing fee. (Ouch!!!). And, of course, you will have to complete the Financial Management Course, and file the Certificate. The Court will normally grant your Motion without the necessity of a hearing.

Q. Will filing for bankruptcy "ruin my credit", and for how long?

A. This question is very common, and it is asked in a lot of different ways and for a lot of different purposes. First, credit reporting and credit scores are more a matter of the credit industry standards and practices than it is of law - especially bankruptcy law. Second, if you are filing bankruptcy, it is likely that your credit score is not a "good" score. The good news is that it actually may improve somewhat after the discharge in bankruptcy. The bad news is that the bankruptcy filing will remain a part of your credit history for a long time (about ten years). The good news is that you will be able to obtain some credit, and improve your credit score, and you are very likely to be able to obtain credit to buy a car or house. The bad news is the interest rate will be higher and that will cost you more money.

Q. Can I get a credit card?

A. The answer seems to vary from person to person. If employed, then you will generally be able to get some form of high-interest rate, low borrowing amount credit card from some issuer. You may have to get a "secured" card which requires that you pay them a deposit before they let you have a card. Unfortunately, this may be necessary to rebuild your credit.

Q. Can I buy a car?

A. Yes. If employed, then you will generally be able to get some form of car loan after the discharge order has been issued in your case. It will have a high interest rate. The lenders know that they have a security interest in the vehicle and that, if you default, they will have 8 years to collect on the deficiency balance before you can file a new Chapter 7 bankruptcy case.

Q. Can I buy a house?

A. Yes. The mortgage lenders I have spoken with tell me that you should wait one year from the date of discharge, and you should do some credit rebuilding during that time by paying all of your reaffirmed debts, rent and any newly acquired debt on a timely basis. If employed, then you will generally be able to get some form of loan to purchase a home. It will have a higher interest rate but you can get a loan.

Contacting the Right Attorney: Bankruptcy can be a complicated matter. The responses to these Frequently Asked Questions are general in nature, and are not intended to provide legal advice for specific cases. A consultation with a Georgia bankruptcy attorney can provide you with the information you need to determine which option best addresses your circumstances. As a solo practitioner, I am able to give more time and personalized attention to my clients. I will personally communicate with creditors or banks to resolve your issues. Your case will never be handed down to a legal assistant or other staff member.

NOTICE: The services or benefits offered are bankruptcy relief under the provisions of the U.S. Bankruptcy Code. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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Joseph W. Segraves, Attorney at Law
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