Can I keep one of my credit cards?
If there is no balance on the card, it will not be listed on the bankruptcy petition and the chances are good that that issuing company will allow you to maintain that card. If that card is with an issuer for whom we have listed a debt, I can tell you that the issuer will most likely cancel all of their cards issued to you.
Do I have to list loans from family members?
The law requires you to list all of your outstanding debts, even those with family members. If you can afford to pay such a debt with regular payments, you can always ask the Court to allow you to “re-affirm” that debt. Reaffirmation takes the debt out of the bankruptcy process. Even if you do not reaffirm the debt to a family member, there is nothing stopping you from repaying it after you have received your discharge from the Bankruptcy Court.
What about loan modifications so I can afford to keep my home?
The US Bankruptcy Court for the District of Rhode Island is one of only two such courts that have a loss mitigation (loan modification) program in place. Either the debtor (you) or your creditor (lender) can move to put this program in motion after you file for either Ch. 7 or Ch. 13 protection. The Court assist the parties In making the determination of whether or not a loan modification will work for the debtor and lender by controlling the time it takes to get a loan modification and moving the parties along the process. If a debtor qualifies (in arrears or in jeopardy of foreclosure; loan amount under $729,750.00; mortgage older than 1/1/09; current mortgage payment (PITI] is more than 31% of homeowner's monthly gross income) the lender will try to reduce the monthly mortgage payment to 31% of the debtor's gross (pre-tax) income. This can be done by any combination of the following methods: reduce interest down to 2%; extend the term of the loan out to 40 years from the date of modification; and/or deferring a portion of principal, interest-free until the loan is paid off. If a debtor qualifies and the new modification meets the lenders Net Present Value Test, the Court reviews the Loss Mitigation Order and approves or rejects it. If approved, the modification is in place until the loan is paid off, regardless of the debtor's future financial circumstances.
Will everyone know that I filed bankruptcy?
No. While the records at Bankruptcy Court are public, there is no longer any public notice of a filing. Someone would have to be looking for your specific case to find it and everyone concerned with your case would already have notice through the Court mailings.
The local newspapers do not publish bankruptcy filings.
Can I keep my home and car?
If the financial pressure is from other consumer debt (medical bills, credit cards, etc.) and you can afford to pay the mortgage and/or car loan if you did not have those other debts, the answer is yes. The Court will allow you to “reaffirm” the home mortgage or the car loan and you will continue to pay these just as if you had not filed a bankruptcy petition.
How long does the bankruptcy filing affect my credit?
By law, the credit reporting agencies can maintain the filing on your credit history for 10 years. This does not mean that it will always have as negative an impact as it will immediately after filing. With thoughtful action, you will be able to rebuild your credit history starting right after you receive your discharge from the Bankruptcy Court.
Is bankruptcy the only way out of a foreclosure situation?
Not necessarily. With new laws recently passed by Congress, you and your bank can agree on a "Short Sale", wherein the bank agrees to take less than they are owed, and forgives you the difference. This forgiveness used to result in a taxable event to the homeowner. This is no longer always the case.
The Rhode Island Supreme Court licenses all attorneys in the general practice of law. The Court does not license or certify any lawyer as an expert or specialist in any field of practice.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.