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• Will my future acquired property be taken? In Chapter 7, any property acquired by the debtor after filing the petition is not subject to seizure as property of the estate unless it was owed to them when they filed or is acquired within 6 months of filing by inheritance, devise or bequest, or by property settlement with the debtor's spouse, or as a beneficiary to a life insurance policy (11 U.S.C. §541). In Chapter 13, property acquired by the debtor after filing the petition but before the case is closed, dismissed, or converted to Chapter 7 will be property of the estate (11 U.S.C. §1306). • Will I ever be able to get credit again? Credit reporting agencies will report a Chapter 7 bankruptcy for 10 years and a Chapter 13 bankruptcy for 7 years. The Credit Bureaus must then drop it from credit reports (Fair Credit and Report Act §1681(c)(a)(1)). Some credit companies will still offer credit, albeit at a higher interest rate, because generally a bankrupt cannot file for bankruptcy again for 8 years from the date they filed the petition. The credit will be more expensive, but available. Moreover, a bankrupt can obtain a secured credit card to slowly rebuild their credit. • Can a non-citizen file for bankruptcy? A legal resident non-citizen may file for bankruptcy and not harm their chances of obtaining U.S. citizenship. However, a bankruptcy by an undocumented immigrant, or the sponsor of such a person, might allow the Immigration and Naturalization Service (INS) to deny legalizing their status. An immigration specialist should be consulted before proceeding. |
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Client Concerns and Misconceptions
Part 2 of 2