FREQUENTLY ASKED QUESTIONS

1. Does bankruptcy ruin my credit? How long is this on my credit report and how long will it take to re-establish my credit?
2. How long does Bankruptcy last?
3. Will I lose my house or car?
4. How much do I need to owe to file bankruptcy?
5. What if I've filed Bankruptcy before? Can I file again?
6. Can I keep a credit card for emergencies?
7. Do I have to go to court?
8. Can't "debt consolidation" companies lower my payments without filing Bankruptcy?

1. Does bankruptcy ruin my credit? How long is this on my credit report and how long will it take to re-establish my credit?

NO! Your job is your credit. Payment history, and available credit are the major factors in a credit score. Late payments, judgements and Credit Counselor sponsored repayment plans all damage your credit score. Credit score measures your borrowing ability and repayment ability. Only creditors say “rebuild your credit by borrowing."

Borrowing to build wealth is a financial myth! Avoid borrowing after bankruptcy if you ever hope to become wealthy. Conventional home loans, car loans and other loans are available almost immediately, but the interest rate is high. Government insured home loans are available at six months. Interest and fees drive bankruptcies by increasing your household operating expenses. People making less money than you or I have become wealthy by keeping expenses down. “The borrower always becomes the servant of the lender”, so “save for your future, don’t be your lender’
s future”.

2. How long does Bankruptcy last?

Chapter 7 (no re-payment), takes about 4 months from filing to finish.
Chapter 13 takes between three to five years to complete.

3. Will I lose my house or car?

No, but you continue secured house or car payments, either directly or through plan payments, to keep the collateral.

4. How much do I need to owe to file bankruptcy?

No minimum amount, but $5,000-$10,000 unsecured debt gets beyond where most legitimate Credit Counselors can help. Historically, we advise clients to track and budget their expenses for one to three months to determine a realistic budget and repayment plan. Harassing phone calls and collection lawsuits are big indicators you may need to file bankruptcy! Whatever you have been doing, it is not working. The creditor is now aggressively trying to take control of your repayment plan by harassing you. A Judgment is bad...a Judgment will attach to your property. When you sell real estate, WHAM, the title company cuts your equity check to the creditor or WHAM, your payroll check is down 15-25% or bank account is frozen . Rarely does it make sense to file bankruptcy to get rid of a $2,000 Judgment, yet that is usually only the tip of the iceberg. When the creditor takes 15 -25% of your paycheck, it’s too late! How can you pay for your Bankruptcy then? The sooner you file, the sooner your financial future begins. If you have been sued, have harassing phone calls, or you can’t realistically repay the debt in two years, we generally recommend bankruptcy. If you don’t have this situation, owe less than $7,500 unsecured debt, and can have $250 at the end of the month, with some “belt tightening” three months in a row, we believe it makes more sense not to file bankruptcy. If the “hole” grows to $10,000 or more, you need to re-evaluate.

5. What if I've filed Bankruptcy before? Can I file again?

The time between Chapter 7 bankruptcy discharges is extended to eight years from filing date to filing date. It is now four years between filing a Chapter 7 that was discharged, and filing Chapter 13 and receiving a Chapter 13 discharge. Some NOW FILE “PROTECTION BANKRUPTCIES” and pay secured debtors first.

6. Can I keep a credit card for emergencies?

To keep a credit card, you should list the creditor and call the creditor two weeks after filing advising you want to keep the account. This will avoid a “surprise” account closing. Although you have listed the creditor on your bankruptcy, most will be happy to transfer the balance to another card. Zero balance creditors should not be listed. Debit cards are recommended and preferred.

7. Do I have to go to court?

Everyone filing Bankruptcy MUST attend a '341' meeting after filing. The 341 meeting is presided over by your Trustee, not a judge. Our office is conveniently located only three blocks from the meeting location for all Central Division Filers in DOWNTOWN Jefferson City.

8. Can't "debt consolidation" companies lower my payments without filing Bankruptcy?

You and the debt counselor are at the mercy of the Creditor to reduce your payments. Only Bankruptcy can force a Creditor to accept payments according to your ability to pay or inability to pay. Debt counseling, debt dettlement and credit repair may, in the long run, damage your credit score more. Most debt counselor repayment plans keep a percentage of your payments as their fee (talk about a conflict of interest!). Most repayment plans fail within a year. Only Bankruptcy orders the creditors and debt collectors to stop calling or be subject to court sanctions. If you have a Bankruptcy repayment plan it is within your ability to pay, even if you can't repay it all.

BANKRUPTCY IS STILL THE ONLY EFFECTIVE WAY OF DEALING WITH ALL LEGALLY OWED DEBTS!

Contact Us

Jefferson City: (573) 635-6850
Columbia: (573) 442-8160

Our Office:

529 East High St.
Jefferson City, MO 65101

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DISCLAIMER:
The information provided in The Bisges Law Firm, P.C. web page is offered for informational purposes only, and it does not constitute legal advice. The Bisges Law Firm, P.C. does not have an attorney-client relationship with you based upon your visit to this web page. If you have a specific legal question, you should contact an attorney. The Bisges Law Firm is a debt relief agency.