Common Bankruptcy Questions, Part IV

Continuing our discussion on common bankruptcy questions, we begin with the age-old question of whether you will ever get credit again. This answer is, of course, always asked in every bankruptcy consultation and subsequent case. The answer is yes. Just by filing the bankruptcy, you are freeing yourself of debt that had been dragging your credit score down to begin with. Because you remove that debt and thus have the ability to pay off other debt, combined with the fact that you can't file another bankruptcy for eight years, you are actually a decent credit risk after your discharge.

The key to getting credit again is to rebuild your credit in an intelligent manner. Obtain secured credit cards after your filing and use those ONLY, paying off the balance each month to safely and securely rebuild your credit. Be wary of a flood of credit card offers after your discharge and be sure not to incur any other unsecured debt. In a couple years after the filing, you can look into obtaining mortgage loans as well. The end result, with the bankruptcy, is a fresh start with all of your finances, including future credit.

Clients often wonder as well if their employer will find out about the bankruptcy. In normal cases, the employer will not receive notice or likely become aware of your bankruptcy filing. If you have a case involving a wage garnishment, however, your employer will be notified after filing the case to stop the garnishment pursuant to the automatic stay in the bankruptcy. In this case, and this is usually the only instance, your employer will be notified.

Finally, clients often ask what the term "reaffirm" means. Reaffirming on the debt essentially means to re-obligate yourself personally on the debt. This is standard procedure for certain secured debts, like a car loan, to continue owning and operating the vehicle in the normal manner. On certain debts, however, you will want to consult your bankruptcy attorney because reaffirming on the debt after the filing of a bankruptcy means you are responsible for that debt for any subsequent failure to pay.