Bankruptcy FAQs
- How long does a bankruptcy stay on my record?
- Will filing for bankruptcy end those calls from creditors and collection agencies?
- When does filing Chapter 11 make sense?
- What happens to my corporation if I file personal bankruptcy?
- What happens to me as a shareholder when a corporation declares bankruptcy?
- Can a business be forced into bankruptcy?
- How many times can I file for bankruptcy?
- How long will my bankruptcy appear on my credit report?
- How can I file for bankruptcy?
- Must I still pay my bills after I file for bankruptcy?
How long does a bankruptcy stay on my record?
Bankruptcies remain on credit reports between seven and ten years. Deciding to declare bankruptcy is a serious decision. That is why it is important to consult an experienced bankruptcy attorney so you fully understand the bankruptcy options and their consequences.
Will filing for bankruptcy end those calls from creditors and collection agencies?
During the time you are working out a plan or your trustee is gathering and preparing your assets to sell to satisfy your debt, bankruptcy code dictates that your creditors must stop all collection against you. Once the bankruptcy petition receives the "Relief Ordered" stamp on the filing, you are protected. If a creditor still tries to collect directly from you after that point, you should immediately notify the creditor in writing that you have filed bankruptcy and provide it with either the case name, number and filing date or a copy of the filed petition. You may be entitled to take legal action.
When does filing Chapter 11 make sense?
In Chapter 11 bankruptcy, your commercial enterprise pays creditors according to a court-approved reorganization plan. This allows your business the opportunity to get back on its feet and back on a path to profitability. Bankruptcy Court approves or rejects your plan. You should consult both your financial and legal advisors to determine whether this serious step is right for you and your business. Not every Chapter 11 case results in restored profitability. Chapter 11 could also ultimately result in liquidation.
What happens to my corporation if I file personal bankruptcy?
Personal bankruptcy does not affect the corporation, since the corporation is a legal entity separate and distinct from its shareholders.
What happens to me as a shareholder when a corporation declares bankruptcy?
A corporate bankruptcy should not directly affect its shareholders. If the officers or shareholders are personally liable for the business debts, the automatic stay in the corporation's case does not prevent creditors from trying to collect from others who may be liable. Shareholders do not have to be notified of a Chapter 7 filing, because they usually do not receive anything in return for their investment. Once creditors are paid in full, the court notifies shareholders to give them the opportunity to file claims to whatever money remains.
Can a business be forced into bankruptcy?
Yes. Creditors can initiate an involuntary bankruptcy proceeding against a business. This occurs in infrequent situations when creditors are concerned that the debting business is squandering or misappropriating assets that should otherwise go toward paying debts owed them.
How many times can I file for bankruptcy?
An individual cannot file for Chapter 7 bankruptcy if he/she has filed for Chapter 7 or 11 bankruptcy within the previous eight years. An individual cannot file for Chapter 13 bankruptcy if he/she has been granted Chapter 7, 11, or 12 discharge within the past four years or Chapter 13 discharge within the previous two years.
How long will my bankruptcy appear on my credit report?
Bankruptcy remains on your credit history and can appear on your credit report for ten years.
How can I file for bankruptcy?
We highly recommend you hire an attorney to file the required petitions. You must file a petition with the United States Bankruptcy Court in the district that has jurisdiction over you and/or your company. It must be signed under oath under penalties of perjury, and it must list all assets and the value of each, and the amount of all debts.
Must I still pay my bills after I file for bankruptcy?
Yes. You must continue to pay your monthly bills, including rent, electric and utility bills, house and car insurance, and other regular bills.
