Repercussions of Filing Bankruptcy

The repercussions of filing bankruptcy after new laws and the reform act

While a case is pending, the trustee, a creditor, a party in interest, or the court upon it's own motion, may all file objections to relief requested. In practice, courts seldom sustain objections unless the debtor clearly fails to follow the law. Courts typically show little patience for creditors who file frivolous objections. As a mater of judicial economy, Courts normally set strict deadlines for filing objections, hearings, if any, and the proposed final orders. Federal Court Judges are known for their keen sense of purpose and moving cases along toward a final resolution.

Beginning October 17, 2005, Courts lose judicial discretion and must grant creditor motions and objections in many new circumstances, unless refuted by the debtor or their attorney according to new stringent technical requirements. Debtors are responsible for attorney fees required by this new legal procedure. This procedural change in the objection process represents a significant advantage for all creditors, whether seeking to harass, intimidate, or outspend legitimate debtors who attempt to advance meritorious cases under Chapter 7.

Repercussions of filing bankruptcy after discharge

Each filing creates a permanent public record. Credit reporting agencies are authorized by law to include filing data for up to 10 years. Almost all credit applications used by major lenders ask if the applicant has filed in the last 10 years, and may deny credit based solely on a positive answer. Also, insurance companies now consider credit ratings in assessing potential for future claims, and may increase premiums.

The Code prohibits employers to discriminate against any employee based solely upon filing Chapter 7 or 13. Nevertheless, employees engaged in financial careers, fiduciary duties, or any job requiring financial advice report difficulty in future career advancement. Also, many prospective employers consider past filings when making hiring decisions. In a tight job market, these small concessions may distinguish one candidate above all others.