Frequently Asked Bankruptcy Questions

If you are struggling with debt, you may be wondering if bankruptcy is right for you. Despite some unfortunate myths to the contrary, bankruptcy is a powerful tool that can provide life-changing relief to individuals who are experiencing financial problems. Our lawyer at Law Office of Matthew Doyaga, LLC recognizes you have questions about how bankruptcy works, whether you qualify, and how it can help you. Our bankruptcy FAQ covers many of these common concerns and addresses many of the misleading things you may have heard about filing. 

If you are considering filing for bankruptcy, our attorney can provide the compassionate and comprehensive guidance you deserve. Call (888) 490-7958 or contact us online to schedule a free initial consultation.

Frequently Asked Questions

  • FAQ

    • Will Filing for Bankruptcy Hurt My Credit?

      There is no avoiding it: Filing for Chapter 7 or Chapter 13 bankruptcy will hurt your credit, but the damage does not have to be permanent. Keep in mind that your credit will likely continue to suffer until you “stop the bleeding” and address your debt problems. Filing for bankruptcy may lower your credit scores in the short term, but it can help you in the long run.

      A Chapter 7 will stay on your credit report for as many as ten years, while a Chapter 13 bankruptcy will remain for up to seven years. You can take immediate steps to improve your credit after bankruptcy, and our debt relief professional can assist with credit recovery strategies.

    • How Can I Stop Creditor Harassment?

      Many debtors do not realize they have rights when dealing with creditor harassment. The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits many types of unacceptable conduct. Many states also have their own laws that reinforce and expand these protections.

      Debt collectors cannot call you at inconvenient hours, use abusive or threatening language, attempt to embarrass you, or lie to you. They also cannot continue to contact you if you ask them to stop.

      Before you do anything else, you should always ask a debt collector to prove they own and have the right to collect a debt. If a creditor violates your rights, you can file a complaint, take legal action against them, and potentially obtain compensation. However, this will not eliminate the debt if they have a right to collect it, and a creditor may be compelled to file a collection lawsuit if you exercise your rights. If a creditor obtains a judgment against you, they may be able to file liens against your property, seize your assets, or garnish your wages.

      Filing for bankruptcy will put a complete stop to all creditor communications thanks to the automatic stay. Filing also prevents creditors from pursuing collection lawsuits or taking other collection actions against you. Once your bankruptcy case is over, creditors will no longer be allowed to contact you about any unsecured debts that were discharged.

    • Is Bankruptcy the Only Option for Saving My Home?

      Not necessarily. Most lenders do not want to foreclose your home if they can help it, and many will work with you to find an alternate solution. You may be eligible for a home mortgage modification, which can help you reduce your monthly payments by extending your loan term, lowering your interest rate, or switching you from an adjustable-rate loan to a fixed-rate loan. Our lawyer can help you negotiate with your lender.

    • Can Bankruptcy Save My Home from Foreclosure?

      In many cases, yes. If you are behind on your mortgage payments or have received notice that your lender intends to foreclose, you should speak to our bankruptcy attorney right away. If you file for bankruptcy before your home is sold, you can stop the foreclosure process and take steps to bring your mortgage current.

      Filing for Chapter 13 bankruptcy is generally the most advantageous option if you are looking to protect your home. Upon filing, the automatic stay will prevent your lender from initiating or continuing the foreclosure process. Mortgage debt is prioritized over unsecured debt, meaning your plan payments will go toward your missed mortgage payments before your credit card or medical debt. You must bring your mortgage current over the three-to-five-year plan.

    • What Is the Automatic Stay?

      When you file for bankruptcy, the court will promptly issue “the automatic stay,” an order that prevents creditors from taking collection actions against you. This means that your creditors cannot contact you about debts, file lawsuits against you, repossess your property, foreclose your home, or garnish your wages. The automatic stay will typically remain in effect throughout your bankruptcy case.

    • Will I Lose Everything If I File for Bankruptcy?

      No. This widespread claim fundamentally misunderstands the bankruptcy process. In many cases, bankruptcy can help you save assets you would otherwise lose.

      Chapter 7 bankruptcy does involve a liquidation process in which non-exempt assets are sold to partially repay debts. This is not as scary as it may seem, as you can generally use federal or state exemptions to protect many types of property. The specific exemption options and values vary by state, but many filers lose little to nothing. Our seasoned bankruptcy lawyer at the Doyaga Law Group can help you make the most of available exemptions.

      Chapter 13 bankruptcy, meanwhile, does not involve liquidation of any kind. Chapter 13 is often used to save secured property that is in danger of being foreclosed or repossessed.

    • Does Bankruptcy Eliminate Debt?

      Yes, bankruptcy can be used to eliminate many types of unsecured debts. Unsecured debts do not have collateral, and examples include credit card debt, medical debt, personal loans, and unpaid utility bills. The bankruptcy court will typically “discharge” your remaining unsecured debts when you complete a Chapter 7 or Chapter 13 bankruptcy.

      Bankruptcy cannot eliminate secured debts without jeopardizing the associated secured property. For example, you cannot eliminate missed mortgage payments without losing your house. Bankruptcy also cannot in most cases get rid of student loan debt or tax debt.

    • Do I Have to Pay Back Debts If I File for Bankruptcy?

      The answer is complicated, but, in short, it depends. In a Chapter 7 bankruptcy, you do not have to make any additional payments on your unsecured debts. Instead, your non-exempt property will be liquidated to partially pay back these debts. You will not be responsible for any remaining unsecured debt, but you will be responsible for secured debts once your bankruptcy case is over.

      In a Chapter 13 bankruptcy, you do have to directly pay back at least some of your debt. You will need to make monthly payments for three to five years. The amount of this payment is linked to your current level of disposable income. You will not be required to pay more than you can afford.

    • How Long Does Bankruptcy Last?

      It depends on whether you file for Chapter 7 or Chapter 13. Chapter 7 bankruptcy is known for its relative efficiency, as many filers complete the process within several months. The Chapter 13 bankruptcy process is considerably longer: You will commit to a repayment plan that lasts between three to five years.

    • Which Type of Bankruptcy Is Right for Me?

      You will likely only qualify for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Your current financial circumstances will determine your eligibility. If you have very little disposable income or make less than your state’s median average income for your household size, you probably qualify for Chapter 7. If you have reliable income but still cannot keep up with your debts, you will likely need to consider Chapter 13. Other factors may influence whether you should file for Chapter 7 versus Chapter 13, so be sure to explore your legal options with an experienced legal professional.

    • Is There More than One Type of Bankruptcy?

      Yes. There are two major types of consumer bankruptcy: Chapter 7 and Chapter 13.