Bankruptcy Part 3 Q&A: Podcast Transcript
February 4, 2010 · Filed under Bankruptcy
Here is a similar transcript to review from a podcast on the topic of bankruptcies in San Diego found here.
Q. How does bankruptcy work if you’re married? Spouse with different credit ratings.
In a community property state such as California, both individuals will have to report their income if they married regardless of whether they file jointly or without their spouse. If both spouses file, the bankruptcy will affect their credit rating; if all the debt are in both spouses name both will have to file. If everything is kept separate and all the debts are in one spouses name (particularly if incurred prior to couple becoming married), it is possible that only one will have to file.
Q. When filing for personal bankruptcy (chapter ?), can creditors touch the equity in your home?
If the equity in your home exceeds the homestead exemption, then yes, the portion that is not covered by the homestead exemption will be subject to be sold by the bankruptcy trustee to repay the creditors. The homestead exemption in CA for a single 75,000 for a married couple, and 150,000 if one of the spouse is disabled. If you have more equity than what is protected then yes creditors can touch that portion.
Q. How soon after bankruptcy can you buy property? How long until you can get a loan for a home?
It varies with each person and how current you are with your obligations after filing for bankruptcy, but I have clients who get a loan and buy a home in less than 2 years after filing for bankruptcy.
Q. How does bankruptcy affect students from getting loans?
It depends on whether the student loan program is federal or private. Generally speaking, a bankruptcy has no impact on eligibility for federal student aid, since the loan is being guaranteed by the federal government. Many private loan programs have credit criteria that preclude people with a bankruptcy within the past 7 or 10 years from borrowing without a creditworthy cosigner. There are, however, exceptions if the bankruptcy was initiated for reasons beyond the borrower’s control, which should be discussed with your bankruptcy attorney.
Q. I’ve filed once and now I have to file for a second time, is there a time period where you cannot declare a second bankruptcy?
Generally, you can only file for Chapter 7 bankruptcy every 8 years. You can file for a Chapter 13 anytime after your Chapter 7 discharge to pay off any remaining liens, avoid foreclosure, or an opportunity to catch up on arreages.
Q. Are there certain things that can be done to prevent personal information after bankruptcy from being made public?
Well, both state and federal laws require that personal information in bankruptcy petition and schedules be redacted, so they do not become public information by virtue of filing for bankruptcy. As of Dec 1st, 2009, a new law came out that required every bankruptcy filing must have all personal information redacted. Personal information is virtually unavailable.
