Answers To Common Questions About Bankruptcy
Filing for bankruptcy is a big decision, and it is natural to be filled with questions. A knowledgeable attorney can be a great resource as you consider your own options for debt relief. I am William Gillen, a bankruptcy attorney with more than two decades of experience. On this page, I’ve provided answers to some of the most common questions I hear from prospective clients.
Bankruptcy Questions And Answers
After reading these answers, I invite you to contact the Law Offices of William M. Gillen, PC, to ask your own questions during an initial consultation.
If I declare bankruptcy, will I lose my house?
While the answer to this question is case-specific, the good news is that many people can keep their homes when filing for bankruptcy. Specifically, Chapter 13 is the option that most homeowners choose when faced with this concern. The important thing to remember is that you’ll need to find a way to become current and stay current on your mortgage payments, which bankruptcy can help with.
Filing for either Chapter 7 or Chapter 13 will trigger an automatic stay, which, among other things, will temporarily halt any foreclosure activity on your home. This will give you time to figure out the best path forward in consultation with an attorney.
Should I file for bankruptcy with my spouse, or should we file as individuals?
You can choose how to file, and the decision will come down to a range of factors. These include (but are not limited to) each spouse’s credit score, the value of your separate and marital property, the amount of separate and marital debt that you have, the type of bankruptcy you wish to pursue and how New Hampshire’s exemption laws would impact the assets you most want to keep.
There is no substitute for case-specific advice, so the easiest way to make this decision is to work with an experienced and knowledgeable bankruptcy attorney.
How will bankruptcy affect my credit, and can I rebuild it?
Declaring bankruptcy will have a significant impact on your “creditworthiness.” A Chapter 7 will remain on your credit report for 10 years, while a Chapter 13 will be on your report for seven years. Pursuing either will also cause damage to your credit score.
However, if you’ve been struggling with debt for a long time, chances are good that your credit score is already in trouble. Filing for bankruptcy is usually an effective way to break the cycle of delinquency and overwhelming debt.
Another important point is that while bankruptcy will mark you as a “credit risk,” it may also send the sign that you are taking responsibility for your problems and trying to fix them. Your access to credit may be very modest at first, but every positive financial step you take will start to rebuild your credit. It can happen much more quickly than you might expect.
How does bankruptcy protect me?
When you file for bankruptcy, you are immediately protected by an “automatic stay.” This is a freeze on all collection-related activity, communications from creditors and legal processes related to debt, including civil lawsuits. You cannot be evicted, have your utilities disconnected or go through foreclosure during this time. Creditors are barred from contacting you and can face penalties for doing so.
The automatic stay isn’t permanent, and it alone won’t solve your problems. But if you’ve been experiencing creditor harassment and living with the fear of losing access to basic necessities, the automatic stay provides desperately needed relief so you can start breathing again and strategize a long-term solution through bankruptcy.
How does bankruptcy provide a fresh start?
It provides both financial relief and psychological relief. At a certain point and under certain circumstances, debt becomes impossible to repay. In these cases, bankruptcy is the only reasonable option. By either discharging debt or reorganizing it into a manageable repayment plan, bankruptcy allows you to gain the financial freedom that you could not get on your own.
That financial relief also improves mental health and psychological well-being, which should not be undervalued. Debt is a major source of chronic stress, depression and other mental health issues that can ruin the quality of life and even shorten one’s life. The chance to start over with a clean slate brings peace of mind that is, quite frankly, priceless.
Have Additional Questions? Contact Me For Answers.
My firm has offices in Manchester, Nashua and Concord, and I serve clients throughout southern New Hampshire. To discuss your rights and legal options with an experienced and attentive attorney, call me at 603-882-3223 or reach out online to schedule a consultation.
The Law Offices of William M. Gillen, PC, is a debt relief agent. It helps people file for bankruptcy protection under the U.S. Bankruptcy Code.