Will my credit be ruined if I file Chapter 7 Bankruptcy?

More information: I live in Everett and have been considering filing for a Chapter 7 Bankruptcy because I cannot afford my credit card payments.  Someday I would like to buy a new home and I am concerned about my credit score after I file the Bankruptcy.  Will my credit be ruined?

Answer: That is a very good question. Actually, it’s one that most people ask during the initial consultation. Here is a well written article directly on point:

By Douglas Jacobs, California Bankruptcy Attorney

Not really.  The greatest effect on your Credit Score (Fico score) Is the number of late payments on your accounts.  More late payments – worse scores.  Certainly there are other factors, and filing bankruptcy may have the immediate effect of lowering the score.

But why do you care?  That’s the truly important question.

First of all, if you have months of missing credit card or house payments, your  credit score is none too good at the moment. Filing bankruptcy won’t hurt it that much.  And it will give you a fresh start – a clean slate to build your credit back from where it is and in far less time than it takes struggling to pay off those credit cards. [Read more...]

If I file for bankruptcy can I transfer title of my car to my sister?

More information: I live here in Malden and I am considering filing for bankruptcy. I own an 2010 Toyota Camry in my own name with no loan. Can I transfer it to my sister to have her name on the title instead of mine?

Answer: No. Transferring an asset with the intent to defraud creditors is fraud. When considering filing for bankruptcy, there are some things you must avoid. Here are some examples by Justin Harelik at Bankrate.com:

Many people find themselves in financial turmoil and finally decide that enough is enough; it’s time to file bankruptcy. The goal is for a fresh start from the monthly burden of trying to pay bills when there is not enough income to do so.

Bankruptcy happens. When it happens to you, try to avoid the following 12 common mistakes.

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If I submit a bankruptcy application can creditors still call me?

Additional  Information:

I lost my job and have had difficulty paying my bills.  I am way over my head in credit card debt and have received a notice of foreclosure on my home in the Boston North Shore area.  Creditors are constantly harassing me.  I have heard that once I submit a bankruptcy application, the creditors can’t call me anymore.  Is that true?

ATTORNEY ANSWER:

Filing a bankruptcy petition “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. The stay arises by operation of law. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments, without the approval of the bankruptcy court. There are some exceptions to this rule, such as criminal proceedings, collection of certain alimony and child support obligations and governmental actions to protect the public.  In addition, the automatic stay is temporary and will end as to the debtor when discharge is granted (at which time the discharge protects the debtor) or denied, when the case is dismissed or closed, or if the Bankruptcy Court grants a creditor or other party relief from the automatic stay.  [Read more...]

I filed Chapter 7 Bankruptcy. Is the lein on my property automatically dissolved?

Additional Information:

I own a home in Melrose, Massachusetts.  A credit card company has placed a lien on my property.  I have since filed for Chapter 7 Bankruptcy and included the credit card debt in the bankruptcy petition.  I recently successfully obtained my bankruptcy discharge, the lien is automatically dissolved, correct?

ATTORNEY ANSWER:

No.  A discharge in bankruptcy does not automatically remove liens on property.  It solely relieves the debtor of personal liability.  In order to remove the lien, the debtor must request that the court specifically order that the lien be voided.  A certified copy of the judge’s order voiding the lien should be recorded in the Registry of Deeds.  Another way a lien can be removed is if the court orders that the property be sold free and clear of liens.
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