I am one of the hapless folks who found myself ensnared in the subprime lending fiasco, and am now faced with no other choice than to file a chapter 7. (I am in CA.) I’ve been toying with the idea of a career change, and I have been looking into several culinary arts programs at different schools. I know that I will need financial aid, but I am not sure if that’s going to be possible with a Chapter 7 under my belt. Does anyone know if a Chapter 7 will render me completely unable to obtain any educational assistance? Another thing I am wondering is, I own property (in this case my home) with another person who is not declaring bankruptcy. (My domestic partner.) My atty says that since we have no equity in our home it won’t be used as collateral, especially since we’ve managed to stay current on our payments, but that my creditors can lien her portion of the property for my debts. What does this mean exactly? And is there any way to avoid this? Any help is appreciated!
I Am About To File Chapter 7 Bankruptcy And I Have Questions!?
27
Sep
browneye
September 27, 2009 at 11:43 am
Everything in a chapter 7 can vary with your location. You need to talk to your Bankruptcy Attorney to get a correct answer.
I doubt any of it will affect your education loan.
Chapter 7 Bankruptcy can discharge all your non-secure debts except for tax and student loan debts.
With secured debts such as car loans and home loans, some of the some equity in your property is exempt from the creditors going after it on a lien, but that can vary with state constitution, state and local laws.
They can’t go after any equity you have on your home, because you have no equity in it, and the lender will not foreclose because you have been making your payments.
I would stop paying on any non-secured loans and credit cards and medical debt though.
One you file your petition for Chapter 7 Bankruptcy, All contracts and lines and debts and civil judgements are automatically stayed. They cannot try to collect after you give the the case # and your attorney’s name and phone, except through the bankruptcy court and your attorney. And your attorney probably won’t even talk to them.
Filing for Bankruptcy over-rides any collection attempt that is not through the bankruptcy court. They MUST go through the Bankrutpcy court, they cannot contact you after you give them the case # and your attorney’s information, that is a federal crime. Report it to your attorney and he will send them a letter warning them.
Feeling Mutual
September 27, 2009 at 11:50 am
Since educational financing is important to you……Do you realize that many jobs run credit checks on applicants…..you may find yourself left out of many employment opportunities because of bankruptcy….many higher paying jobs.
You can clean up your credit, but not a bankruptcy
Sure, your credit is kaput right now…..but 24 months of good credit after you clean up your mess is all you need
Paula M
September 27, 2009 at 11:57 am
First off, filing bankruptcy should not hinder your chances of obtaining an educational loan. Your interest rate will be hire, but you should be fine.
Second, I have never heard what your attorney stated before. If you file for bankruptcy, if is against federal law for creditors to continue collecting on a debt after your bankruptcy is filed. It is against the Fair Debt Collection Practices Act which is Federal Law. Companies can get in HUGE trouble for breaking this law. Please understand that your creditors, up to the bankruptcy is filed, can place a lien on the house. If this happens, it is not wipped out with the mortgage, but must be paid once you sell your home.
THIS IS NOT AND SHOULD NOT BE CONSIDERED LEGAL ADVICE. FOR LEGAL ADVICE CONTACT AN ATTORNEY.