All items from A & L, Licker Law Firm, LLC

What Happens to my Credit Cards when I File Bankruptcy? The quick answer is that it depends. It depends on the status of your accounts. Your credit cards likely fall into one of these three categories:Cards on which you have a zero balance

• On the bankruptcy petition and schedules you must list all of your creditors, meaning people that you owe money to. However, if you have a zero balance then you do not owe them and they therefore do not have to be listed on the petition. This means you MAY come out of the Chapter 7 or Chapter 13 with the credit card. However, there are exceptions.
  • Trustee may take your credit cards
  • The credit card issuer may find out about the bankruptcy – many creditors constantly monitor their customers credit reports for signs on economic weakness
  • The credit card issuer may cancel your zero-balance card – If they learn of the bankruptcy, the company may termite your account based on credit risk. However, some companies are happy to continue doing business with you because now you will not be able to file another Chapter 7 for eight years.

Cards on which you have a balance but you are current on payments

How Will the Bankruptcy Affect Me? I am Filing Bankruptcy: Will I Lose My Job? No employer may fire you because you filed bankruptcy. In addition, an employer cannot discriminate against you in other terms and conditions of employment; reducing salary, demoting you, or taking away responsibilities because of a bankruptcy. However, if there are other valid reasons for taking these actions, then the bankruptcy will not protect you. Simply put, if an employer wants to take action against you, they can as long as there are other valid reasons such as incompetence, tardiness, or dishonesty.How does my Employer Find out About the Bankruptcy?Typically if you are filing a Chapter 7, your employer rarely finds out. However, if you have been sued and are having your wages garnished, your employer is notified. The bankruptcy stops that garnishment, so again your employer is notified in order to stop the garnishment. If you file a Chapter 13, your employer typically will receive notice. In a Chapter 13 plan it is likely that the Judge will order that your Chapter 13 plan payments be deducted from your paychecks and sent directly to the trustee. In order to accomplish this, your employer or at least the payroll department is notified of how much money to withhold and where to send the funds.Do I have to do a wage order for my Chapter 13?

Are Taxes Dischargeable Through Bankruptcy? Some taxes are dischargeable through bankruptcy, but some are not eligible for discharge due to the year the taxes are due and the timeliness of filing the taxes.  If income taxes are more than three years old, they usually can be discharged.  The three year time period is based on the due date of the taxes, which generally is April 15th unless the debtor has been granted an extension.  If the taxes would be due within three years of the filing of the bankruptcy, the taxes would not be eligible for discharge.  It is not based on the end of the tax year but the due date for filing the tax return.  Therefore, if it is November, 2012, tax years 2008 and earlier would be discharged, but 2009, 2010, and 2011 would not because their due dates would be April 15th, 2010, 2011, and 2012, which is within the three year time period before the filing of the bankruptcy. 

A Chapter 13 Bankruptcy can last anywhere fromm 36 to 60 months.  Three to five years is a considerable amount of time and a lot of things can change.  There are a number of issues that may affect your bankruptcy.  Some of the most common changes that need to be addressed are:1. Change in Income.  Over the course of your bankruptcy you may find that you change jobs, become employed when you previously were not, or get a promotion or pay raise.  Any change in income should be reported to your attorney, regardless of whether it is a pay increase or decrease.  You attorney may advise that you need to amend certain schedules and/or amend your Chapter 13 repayment plan.