Frequently Asked Questions about Bankruptcy
Tollefsen Law PLLC provides bankruptcy
services primarily to businesses and business owners. Many of the
same questions apply to consumer as well as business bankruptcies.
How long does a bankruptcy remain on my credit report?
The fact that an individual filed a bankruptcy can remain on the credit report no longer than 10 years under
provisions of the Fair Credit Reporting Act. If a chapter 13 bankruptcy is successfully
completed, the credit reporting industry retains the information for seven years rather than the ten years allowed by law.
What property may I keep after file for bankruptcy?
You are allowed to keep certain property
under the provisions of federal and state law exemptions to protect
your property in bankruptcy. Most people do not exceed these
exemptions and do not lose any of their property. Those who own
property worth more than available exemptions should consider a
Chapter 13 bankruptcy. Businesses that have ongoing businesses can
protect their assets in Chapter 13 (asset value limitation) or
Can I continue making monthly payments on assets like a house or vehicle after I file for bankruptcy and keep
Yes – As long as you catch up the arrearages
and stay current. If you cannot immediately make your accounts
current, Chapter 13 may be the solution. A Chapter 13 bankruptcy
will allow you to keep the property if you make all future monthly
payments and pay a little extra each month to cure your arrearage.
How difficult is it to re-establish credit after receiving a bankruptcy discharge?
Generally within two years of obtaining a
discharge, you will have credit cards and be able to finance a car.
Chapter 13 debtors are often able to finance the purchase of a
vehicle and refinance their homes while in Chapter 13 bankruptcy. It
is easier to re-establish credit after bankruptcy than many would
What's the difference between a secured debt and an unsecured debt?
A secured debt is a loan backed by an asset
like a mortgage on a house or a security interest on an auto. The
creditor has the right to take back the security if the debtor fails
to make a required payment. An unsecured debt is a loan not backed
by an asset like utility bills and credit cards. An unsecured
creditor does not have the right to take repossess property if you
fail to make a payment. The creditor can bring an action to obtain a
judgment against you. Security interests are generally not removed
from property in bankruptcy and the creditor is entitled to payment
or the asset. If the asset is worth less than the debt, the excess
obligation can be discharged. If the asset is returned, a debtor’s
obligation can be discharged.
Why does TL charge for initial consultations?
Due to the volume of request, free
consultations are not practicable. In addition, we have learned that
prospective clients who are serious about solving their legal
problems are willing to pay for the legal services they need. TLO
offers a $50 email consultation for the convenience of those who
need a quick answer to a bankruptcy or business question.