Bankruptcy
FAQs

A landlord can legally refuse to rent an apartment because your credit report was previously denied. However, let's say you're currently renting a house or apartment. If so, your current landlord will often renew your lease without an up-to-date credit report and may not be aware that you have filed for bankruptcy. If you're applying for a new lease, you may encounter some hurdles that are easy to overcome. Offering more collateral may be enough to allay the concerns of potential owners.

There are many situations where bankruptcy may be the best option to keep your assets or keep you out of debt for years to come. The following are some of the more common conditions under which bankruptcy is a suitable option. Of course, each person and their specific situation is unique. You should consult with an attorney at Diaz & Larsen to discuss your options and alternatives. 

If you are in litigation, bankruptcy may be the best and least expensive way to get closer to a lawsuit. You may have options before the trial ends that you won't have after the case goes to trial. Chapter 13 lists debt limits that may fit your situation before a decision is made but may be exceeded if the decision is broad enough. We strongly recommend that you speak with a lawyer from Diaz & Larsen about filing for bankruptcy before any judgment is made against you. In most cases, filing for bankruptcy will end the lawsuit immediately and prevent your creditors from mortgaging your home or garnishing your wages. 

Bankruptcy can stop foreclosure on your house or repossession of your car. In most cases, an "Automatic Stay" arises by law the instant a bankruptcy is filed. The "Automatic Stay" stops the foreclosure process and prevents collection actions, such as repossessions or garnishments. Bankruptcy may also allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time. In Chapter 13, the attorneys at Diaz & Larsen, will design a repayment plan for you with your help.

While bankruptcy can be legally listed on your credit report for up to 10 years, you can start rebuilding your credit history as soon as your bankruptcy is discharged.  Lenders take many factors into consideration when deciding whether to offer you a loan. However, the most important of all the factors they will consider is the debt-to-income ratio. According to the credit rating model currently used by credit bureaus, a debtor's credit rating after filing for bankruptcy is usually boosted by debt liquidation. 

Parties who receive notice of the bankruptcy are:

• Your creditors
• The Bankruptcy Court
• The IRS

Bankruptcy is a public record, so anyone who wants to find out about your bankruptcy could do so. Many people believe that notices of all bankruptcies are printed in the newspapers, but that is not true.

Your employer will generally not receive a bankruptcy notice unless they are also a creditor or a garnishment in place. In this case, your attorney may need to tell your employer that you have filed for bankruptcy in order to overturn the garnishment. Neither the bankruptcy court nor your attorney will contact your employer. Employers are prohibited from discriminating against employees because they file for bankruptcy.    

No. You are required by law to list all your creditors, including friends and family members who have loaned you money. Intentional failure to list a debt is a serious matter and could result in the denial of your entire bankruptcy discharge and even criminal prosecution.

However, you are not prohibited from voluntarily paying selected debts after you file for bankruptcy. Diaz & Larsen can explain how you can legally repay any debt you want, after your default is over, on a purely voluntary basis and without a reaffirmation agreement.

You must attend the first meeting of creditors with your attorney. These meetings are held in the courtroom used by the Bankruptcy Trustees (not in court). The trustee will ask you questions about your bankruptcy filing. If any of your creditors are present, they may ask you questions. However, creditors rarely attend hearings, and when they do, they rarely ask questions. You must appear at this hearing, and failure to attend may result in your case being dismissed. We know that the first meeting of creditors can be very stressful for debtors but with Diaz and Larsen on your side, you won't have anything to worry about.

Alternatives to filing for bankruptcy include private debt consolidation services and agreements with creditors. Personal debt consolidation services work with your creditors so you can get better interest rates or lower monthly payments. Sometimes you can negotiate with your creditors to pay less than you owe. However, only bankruptcy gives you the right to prevent creditors from foreclosing on your property. Chapter 13 gives you the power to compel unsecured creditors to accept a Chapter 13 plan that will pay off part of your outstanding debt. These powers do not apply to private debt consolidation services or agreements.