Within 180 days prior to filing for bankruptcy, debtors are required to receive credit counseling from an approved "non-profit budget and credit counseling agency." Also, after filing for bankruptcy, but before discharge, debtors must complete a mandatory Personal Financial Management Education course from an approved agency. The fees for these classes vary and may be waived or reduced in certain circumstances.
Debts that are not Dischargeable
The following debts are not dischargeable:
1. Any debts owed for luxury goods over $500.00 which were purchased within 90 days of filing for bankruptcy;
2. Any cash advances taken on a credit card for $750.00 or more within 70 days of filing for bankruptcy;
3. Federal, State, and local income taxes that became due in the last 3 years; Any student loan that became due within the last 7 years; Court-ordered child support and alimony payments along with other divorce related debts; Any court-ordered fines and criminal restitution; Any debt for death or personal injury cases caused while driving while intoxicated; Debts you may have incurred to pay off "non-dischargeable" debts; Debts that you failed to list on your bankruptcy Petition; Debts based on fraud, theft, or dishonesty; Certain condominium fees and charges; Any debts that arose after you filed for bankruptcy.
The following ramifications will result from filing for bankruptcy:
1. Your Chapter 7 bankruptcy will remain on your credit report for 10 years;
2. You may not, depending upon the lender, to receive a mortgage for up to 2 years after the discharge of your bankruptcy;
3. You may or may not, depending upon the credit company be eligible for a credit card for one year after the discharge of your bankruptcy. But, there are secured credit cards that you may be eligible for, which require a deposit. But also note, that some credit card companies will extend credit to you, and you may receive solicitations from credit card companies immediately, as they know that you cannot re-file for bankruptcy for another 8 years, giving them plenty of time to collect in the event of a default;
4. If you have previously received a Chapter 7 bankruptcy discharge in the past 8 years, you are not eligible for another bankruptcy at this time.
Reaffirming a Debt
If you "reaffirm" any debt with a creditor, that debt cannot be discharged. "Reaffirm" means that you have an agreement with a creditor that you will repay the debt, rather than include it in a bankruptcy.
What NOT to do if You are Going Through a Bankruptcy
1. Do not make any attempt to hide any information, assets, or transactions from the Bankruptcy Court. You will subject yourself to 5 years in prison and/or $500,000.00 fine. If there are any transactions that you are unsure about, it may be in your best interest to disclose such matters to an attorney to protect yourself;
2. Do not destroy or conceal any property within one year prior to or after filing, with the intent to defraud a creditor. The same penalties apply;
3. Do not knowingly make any false statements to the Court or your attorney. The same penalties apply.
What You Must do if You are Going Through a Bankruptcy
1. Bankruptcy Law has very strict deadlines. Ensure that you submit all forms to your attorney on or before the date requested. The Court may dismiss your bankruptcy for any unreasonable delay;
2. You must comply with all Court requests.
Remember, your Chapter 7 Bankruptcy can take anywhere from 4-6 months to complete. If you are unsure about your bankruptcy and have questions, it is always best to consult with a bankruptcy attorney.