What happens when you file for bankruptcy?

I live with my mom but I just got a job and it is so part time that it hardly counts. She is in the middle of a divorce. She is having a hard time paying all of the bills on her own and there are so many debt collectors coming after her right now. A credit card sent their lawyer after her and now she has to pay them $225 a month on top of everything else. My stepfather, is now in Virginia - he left her with ALL of the bills and took one of the vehicles with him even though it is under both of there names. Anyways - my question is, if she were to file for bankrupcty - would she lose the house? I dont know how it works. What would happen? She said that she doesnt want to because she does not want to lose the house and she is scared to talk to a lawyer about it so I am really just looking for someone to tell me what happens to your things and your bills when you file. Thank you!


Asked by Anonymous at 3:42 PM on Oct. 2, 2008 in Money & Work

This question is closed and filed in the CafeMom Encyclopedia.
Answers (7)
  • I work for a bankruptcy attorney, so I think I can help you.

    While each state has different laws.. and I'm in Nevada, most laws I've dealt with let you keep your house in a bankruptcy. If she is behind in her monthly payments, and is fear of foreclosure, then a Chapter 13 is the ONLY chapter she can file to save her house. The problem with Chapter 13, is you repay the debt you owe.

    Meanwhile, a Chapter 7 bankruptcy can be filed and this will eliminate the debt that she has. She can keep the house, as long as she's not behind in payments. This chapter takes about 4 months to complete, there are 2 classes (that can be done over the phone or over the internet) that have to be taken, and it will get rid of the debt.

    I don't know the whole situation, but I hope this helps you out. You can always message me with your more specific questions if you need to :)

    Answer by KeelinsMommy at 3:48 PM on Oct. 2, 2008

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    http://tinyurl.com/5g2rsx -- is a debt relief company, you should talk to them

    http://tinyurl.com/sayno2foreclosure might also help




    Answer by customcat2000 at 3:57 PM on Oct. 2, 2008

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  • I am pretty sure if you file for bankruptcy, it does not effect your house or car. All of the other stuff is "unsecured debt". I was looking into filing bankruptcy myself after my divorce. I know chapter 7 is when you don' t have to pay it back and chapter 13 is when you use those debt settlement companies and pay a percentage of what you owe.You should tell your mom to be careful, all of this effects her credit score. Mine is shot! I am weeding out the credit repair companies now to see which one is legit. My lawyer advised me to do that so my ex can't continually screw up my credit. Good luck!

    Answer by Newlydivorced13 at 4:03 PM on Oct. 2, 2008

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  • It depends...

    My mom filed for bankruptcy and lost everything including her house.
    Some friends of our filed also and they were able to keep their house and car.

    It really depends on how she files and if she's behind on the car and/or house payment.....


    Answer by SAHMinIL at 4:07 PM on Oct. 2, 2008

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  • I know a credit repair company that is specifically designed to help people protect their credit after, or even during a divorce. It is www.divorcecredit.com. You should call them and see if they can help. I know a few people who used them and were very satisfied. I am not sure if this is what you were looking for, but it may be what you need down the line. Wishing you the best of luck!

    Answer by Doodle1213 at 4:09 PM on Oct. 2, 2008

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  • Thank you all ! She doesnt care about the credit she said that she never wants another credit card because her husband had talked her into getting a couple and now they are the main people after her. I do not think that she is behind on the mortgage or anything with the house - she is keeping up on that - its basically the credit cards coming after her. And she has finished paying off her car completely.

    Answer by Anonymous at 4:18 PM on Oct. 2, 2008

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  • She probably won't lose anything, most people don't. Here's the thing, if she could work 4 jobs and pay off all she/they owe she's still have bad credit for years and years. BUT if she files Bankruptcy within 2 years, she'll be able to purchase a new house, cars, get more credit cards. Banks push that Bankruptcy is bad because of that 7 year thing, well she'll have 20 years of bad credit if she pays it all off slowly. So what if it stays on your credit report for 7 or 10 years, you are a better risk then someone who is slowly paying it off, because you have NO bad debt.

    Answer by Works4Mom.com at 8:28 AM on Oct. 3, 2008

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