Effect of Filing

How will it affect my Credit Rating?

Generally speaking, if you are filing for bankruptcy, you have probably already done damage to your credit rating. The effect a bankruptcy will have on your credit will depend on your present history and your situation. A Chapter 13 may stay on your credit history for a period of 7 years from the date of filing. A Chapter 7 may stay on your credit history for 10 years from the date you filed.

Will I lose my House?

Filing a Chapter 7 will stop a foreclosure or eviction temporarily, but a creditor can usually get the court’s permission to proceed fairly quickly. Filing a Chapter 13 will stop foreclosure and allow a mortgage arrearage to be cured through the Chapter 13 repayment plan. Keeping your home is one of the most critical procedures you will face in bankruptcy, and if you are a homeowner you should see an attorney, especially if you are in foreclosure.

Child Support

You must remain current on your post-petition child support obligation. One condition of a discharge in Chapter 13 is that you MUST have paid all post-petition child support prior to the discharge. You also cannot get child support obligations discharged in a Chapter 7 bankruptcy. The obligation to support your children is considered so important that the law will not let you out of it by filing bankruptcy.

Student Loan Debt

Student loans are not dischargeable in a Chapter 7 bankruptcy case except under certain very narrow circumstances, but student loan debt may be included in a Chapter 13 repayment plan.

Tax Debt

The following income taxes are priority claims and are not dischargeable:

  • Taxes where the returns were due within three years of the bankruptcy, and
  • Income taxes that were assessed within 240 days (about 8 months) before the bankruptcy.