Learn about 4 bankruptcy questions that are commonly asked in Georgia. Call Hall & Navarro today for a legal consultation.
1. If my spouse files a bankruptcy, will that affect my credit if they have a lot of debt but I do not?
An interesting question that many people ask is whether a spouse filing for bankruptcy would affect their credit report. The quick answer is no, but it’s a big if, really. If you are jointly liable with your spouse on any debt, of course, it would affect your credit if the debt is not paid currently. If your spouse were to file bankruptcy and you had jointly owned or jointly obligated debt with your spouse, you would want to make sure that you continue to pay that debt currently or it would show up on your credit report as a delinquent payment. It would not show as if you are personally filing a bankruptcy but it would show up as a ding on your credit, if in fact the payments were not made current.
2. What should I do after a bankruptcy to start rebuilding my credit?
We have a lot of questions from our clients as to how you can rebuild credit after filing a bankruptcy. That is a very straightforward position. You have to incur debt in order to rebuild your credit. The first thing you might do is get a credit card, maybe it’s a secure credit card where you pay down and pay a deposit of $500 or so on a credit card in order to then use the credit card up to a limit of $500. Something as simple as that helps to build your credit report. You could have a relative cosign with you on an automobile note and that, again, helps to rebuild your credit. The main thing you’ve always got to think about in any sort of bankruptcy proceeding is that credit is what got you into trouble to start with. You want to be very judicious on how you reestablish your credit and how much you actually borrow, because the most important thing from any credit report is making timely payments.
3. What will a bankruptcy do to my credit report?
Many times, people ask us what a bankruptcy will do to their credit report. The answer is it depends. Many people who come to us to file a bankruptcy already have bad credit reports because they’re delinquent on their payments or they’ve missed a few payments. If you missed a payment, missed a couple of payments, your credit report is already what I would call delinquent. In that instance, a bankruptcy really does not necessarily adversely affect your credit report tremendously. A bankruptcy will be shown up on your credit report. Again, a Chapter 7 is on your credit report for ten years, and a Chapter 13 is on your credit report for seven years. The real question always to me is what you are doing to rehabilitate yourself and to get yourself into a better financial situation. Any bankruptcy is supposed to help you look to the future and rehabilitate yourself so that you do have good credit in the future.
4. What’s the difference between chapter 7 and chapter 13 bankruptcy?
I received a call from a woman the other day who asked me about the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. A Chapter 7 bankruptcy is something like a snapshot. It’s a picture of your finances at one particular time. A Chapter 13 is like a video. It’s a moving target. You look at your situation over a period of time. In a Chapter 13, you have a period of time of three to five years to pay back all your debt. If you have car loans, other debts, medical bills, you’re set up over a period of time to pay back that debt. In a Chapter 7, it’s a liquidation type bankruptcy where you look at your situation at one particular time. Your debts are discharged. If you have car notes or house mortgages, you’re not given the opportunity to catch up those payments. You have to keep those payments current. Whereas in a Chapter 13, you have an opportunity to catch up those payments and pay them over a three to five-year period.
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Are you or a loved one in the process of bankruptcy in Georgia and find yourself thinking about these 4 bankruptcy questions? Contact the experienced Georgia bankruptcy attorneys at Hall & Navarro today for a consultation and case evaluation.
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