To discharge debts in Chapter 7 bankruptcy, an individual must demonstrate that he or she has very little income to pay off debts. As opposed to the reorganization of Chapter 13 bankruptcy, Chapter 7 is an asset liquidation process, so if you have steady income, you may not qualify.
The myth that student loans cannot be modified in bankruptcy is so pervasive that most debtors do not try to include them. More lawyers are realizing that reducing or modifying student loan debts during bankruptcy is possible and becoming more common.
In a class action lawsuit against Navient, one of the largest student loan servicers in the U.S., a Texas Bankruptcy judge has denied the defendant’s motion to dismiss, making clear that funds received as an “educational benefit” are not necessarily exempt from discharge in bankruptcy.
One of the most important steps in starting over after bankruptcy is rebuilding your credit score, and a credit card can help you achieve that goal. Let’s look at some ways you can obtain the right credit card.
Technically, bankruptcy laws allow you to file as frequently as you wish, but you will only receive a discharge if enough time has lapsed since your previous discharge. Therefore, it’s important to be aware of the limitations so you do not waste money and time filing for bankruptcy when you are ineligible for a discharge.
The timeframes for receiving bankruptcy discharges differ depending on the type of bankruptcy you file:
Any legal resident of the United States may file for bankruptcy. There is no requirement that you be a U.S. citizen, or even have a green card—anyone who is living in America legally can file for bankruptcy in this country.
In addition, there are no laws that indicate filing for bankruptcy will prevent the United States Citizenship and Immigration Services (USCIS) from approving your green card, visa or application for citizenship. This does not mean that filing for bankruptcy cannot affect your immigration status at all, however.
Individuals who are considering bankruptcy are often concerned about the effect it will have on their employment. For example, will your employer find out you filed for bankruptcy? Could you be fired because of it, or be denied a job during the application phase because of a bankruptcy filing?
As you consider filing for Chapter 7 or Chapter 13 bankruptcy, you may be understandably concerned about the effect it will have on your credit score. However, if you had an excellent credit rating before filing for bankruptcy, you could see a big plunge to you credit.