Bankruptcy Questions and Answers

I am a co-signer for a debt, how does bankruptcy affect my obligation?
If the debt is a dischargeable debt then you will not have to pay it. However, the cosigner will become primarily responsible for the debt. Be sure to list the co-signer as a creditor in your schedules as they have a contingent claim against you.

Can I keep my credit cards after bankruptcy?
Under some circumstances you may keep your credit cards. There are many factors which must be considered. Some of those include the credit card balance at the time of the bankruptcy, what the credit card company is willing to do and
your ability to pay the present and future credit card debt.

Will I lose my job?
No. Bankruptcy laws prohibits discrimination based upon a debtor filing for   protection under the bankruptcy laws.

Can I go to jail if I file bankruptcy?
No. There are no debtor's prisons in the United States.

Will my employer find out about my bankruptcy?
Under normal circumstances, unless your employer is a creditor, your employer will not know.

Will bankruptcy stop a wage attachment?
Yes.

Will bankruptcy stop a judgment?
Yes. Most civil judgments are stopped by bankruptcy.

Will a bankruptcy remove a lien?
Under some circumstances once the bankruptcy proceedings have started, special motion can be filed to remove certain liens. It will take a bankruptcy court order to remove them. This is a complicated area of the bankruptcy law and an
attorney should be consulted.

Will bankruptcy stop an eviction action?
Perhaps. However, this will only delay the inevitable. The owner is entitled to possession of his property and at best you will be able to remain in the property until you have received your discharge from bankruptcy or the landlord obtains an
order from the bankruptcy court. I must caution you that if the only reason you filed the bankruptcy is to stop an eviction then this might be considered an abuse of Chapter 7. If the bankruptcy court finds that this is true then the court can
immediately dismiss the bankruptcy and impose other legal and monetary sanctions on you.

Will bankruptcy stop a foreclosure?
Yes. However, a home is an asset usually secured by a deed of trust. The mortgage company is entitled apply to the court for relief from the automatic stay, the order preventing creditor action by virtue of the bankruptcy. Depending upon
several factors, you may be able to prolong a foreclosure until you have received your discharge from bankruptcy. Usually, to keep a home that is in foreclosure you will have to make a deal with the noteholder.

I am divorced, will bankruptcy wipe-out my obligation to pay community debts?
In general, you will be discharged from all dischargeable community debts. However, you should discuss this with your family law attorney to understand the other implications of the filing of a bankruptcy during the pendency of a dissolution action (divorce case). Also, remember that if you are discharged from community debts, your spouse is responsible for the entire balance owing on the debt. Put another way, they shift the responsibility on to you. 

Disclaimer:
This information deals with Chapter 7 consumer bankruptcy. Each state has its
own bankruptcy laws, so you need to check with your state for details.
Information dealing with Chapter 13 bankruptcy and consumer debt restructuring is not discussed in the above FAQs. The information contained in the following FAQs is provided for general information purposes only and is not intended to be a legal opinion nor legal advice nor is it intended to be a complete discussion of all the issues related to the area of Chapter 7 consumer bankruptcy. Every individual's factual situation is different and you should seek independent legal advice regarding specific information.

Mary Ann Standal * (800) 388-2881 Ext: 214
                            (619) 563-1000 Ext: 214