With competent legal advice on the matter, you will be able to have a clearer picture of what can you not do after filing bankruptcies, avoid new complications and move confidently towards a better financial future. At S&B Legal we will provide you with the best bankruptcy assistance to manage your case successfully.
Key Takeaways
- Filing for bankruptcy is an alternative to facing overwhelming debt, but it is a complex legal process that requires full knowledge of its implications.
- Filing bankruptcy can provide benefits such as eliminating certain debts, protecting income from garnishment, and being able to continue operating a business while debts are resolved.
- After declaring bankruptcy, there are limitations such as the restriction on obtaining new loans without court approval and the inability to get rid of certain debts, among others.
What happens after a bankruptcy?
Filing for bankruptcy is an alternative to facing overwhelming debts, but it is a complex legal process and a step that must be taken with full knowledge of everything it entails. Therefore, before going down this path, you must keep in mind what happens after you declare bankruptcy and prepare for what is coming.
Bankruptcy is a solution for a financial restart for individuals and companies. This legal alternative is attractive because there are several compelling benefits of declaring bankruptcy. Depending on the type of bankruptcy, whoever invokes it may enjoy advantages such as:
- Completely eliminate certain debts
- Getting more time to pay them
- Protecting your income from garnishments and removing other judicial garnishments
- Stop creditor harassment and foreclosures while debt relief works out
- In the case of a business, by filing for bankruptcy while debt relief is resolved you can continue operating and billing.
Thus, what happens after filing for bankruptcy will depend on the bankruptcy chapter you have chosen. If you have filed for Chapter 7 bankruptcy, a trustee will need to determine if you have assets of interest to sell to your creditors and pay off some of your debts: car loans, health insurance, credit card debt, and utility debt, all of this prior to passing a “means test” to determine that your income is low enough to qualify for this bankruptcy.
For your part, if you file Chapter 13 bankruptcy, a three- to five-year debt repayment plan will be established, allowing you to catch up on debts such as mortgages or car loans without losing your property along the way. and without its assets being liquidated.
What can you not do after filing bankruptcies?
Post bankruptcy, you may face some limitations and need to avoid common mistakes like those listed below.
- You will not be able to obtain new loans without bankruptcy court approval
- You will not be able to get rid of debts such as student loans, taxes, child support debts, alimony, and certain criminal fines
- You may not be able to keep assets like credit cards or bank accounts
- You should not hide, transfer, or lie about your assets to prevent them from being included in the bankruptcy process.
- You should avoid unnecessary purchases or excessive expenses that could affect your ability to meet payment obligations.
- You will not be able to sell or transfer property without bankruptcy court approval.
- Avoid ignoring communications and legal requirements related to the bankruptcy process.
- You may not violate the decisions and orders of the bankruptcy court.
Common doubts after declaring bankruptcy
One of the most common doubts on the subject is summarized in a simple question: if I declare bankruptcy, will I lose my house? There are several factors that affect whether you lose your home when you file for bankruptcy, such as the type of bankruptcy you file for and the value of your residence.
For example, in Chapter 7 bankruptcy, your home could be liquidated so that it can be sold and the money paid to your creditors. The reason for this is that Chapter 7 bankruptcy does not void the mortgage holders’ right to take the property in order to cover the debt. In the case of Chapter 13 bankruptcy, you will be able to keep your home if you are able to pay your creditors on time.
But not all is lost! An experienced bankruptcy attorney can help you navigate this path smoothly and will explore options for you to keep your Chapter 7 home, including a reaffirmation of the legal agreement that excludes your mortgage from the bankruptcy process in exchange for you to continue making monthly payments on your debt.
Another common question on the subject is whether bankruptcy affects immigration. It must be remembered that the bankruptcy is registered in a public database that can be accessed by the United States Citizenship and Immigration Services (USCIS). Therefore, although it is not a crime, in certain cases, it could complicate immigration procedures.
For example, if you are applying for a Green Card through family sponsorship or investment, filing for bankruptcy could be a negative factor in your evaluation. Likewise, if you are in the naturalization process, bankruptcy could raise questions about your ability to meet your financial responsibilities as an eventual U.S. citizen.
Additionally, people who are delinquent on taxes may have their application for residency or citizenship denied by the IRS (Internal Revenue Services). Other circumstances that are frowned upon for immigration purposes are non-payment of alimony or bankruptcy being used to avoid paying for luxurious expenses of thousands of dollars, such as an expensive vacation.
It is best, once again, to consult with an immigration attorney who knows how bankruptcy could affect your specific case.
Contact S&B Legal if you are considering filing for bankruptcy
Are financial worries keeping you up at night? Do you feel like filing for bankruptcy is your only way out but don’t know where to start? Don’t hesitate to request a free evaluation from our experienced bankruptcy attorneys. We will analyze your case thoroughly and explain in detail the options available and whether filing for bankruptcy is the step you should take to achieve financial freedom.
Summary
Filing for bankruptcy can be a useful tool for dealing with crippling debt, but it is crucial to understand the process’s complexities, limitations, and potential repercussions, especially as it relates to your assets, housing, and immigration status. It is recommended that you consult with an experienced bankruptcy attorney and be aware of what you can and cannot do after filing for bankruptcy.
Frequently Asked Questions
What happens if I go bankrupt, and are there any benefits?
By filing for bankruptcy, you can gain benefits such as eliminating certain debts, protecting income from garnishment, and being able to continue operating a business while resolving debts.
What limitations exist after filing for bankruptcy?
After declaring bankruptcy, there are limitations such as the restriction on obtaining new loans without court approval and the inability to get rid of certain debts, among others [1].
What can’t you do after filing for bankruptcy?
By declaring bankruptcy, you will not be able to obtain new loans without court approval, nor will you be free from paying certain debts such as student loans, taxes, among others. Also, actions such as hiding assets, making unnecessary purchases or ignoring legal requirements related to the process should be avoided.
What happens to your home when you file for bankruptcy?
Depending on the type of bankruptcy, such as Chapter 7, the home could be liquidated to pay creditors. In Chapter 13, the home can be kept if the established payments are met. A specialized attorney can help explore options for keeping the home [2].
How does bankruptcy affect immigration issues?
The bankruptcy is recorded in a public database that can be accessed by the United States Citizenship and Immigration Services (USCIS). In certain cases, filing for bankruptcy could complicate immigration procedures, such as applying for a Green Card or naturalization. It is advisable to consult with an immigration attorney to understand how bankruptcy could affect each case. [3].
