Lake Barrington bankruptcy attorney set the record straight with regard to many questions that debtors ask:
Will I lose my 401K or retirement fund? No. Your retirement is completely exempt and protected under Illinois law, due to the exemptions for ERISA qualified retirement accounts. So even though a person might have a 401K or retirement account in the upwards of $200,000.00, $300,000.00, $400,000.00, that retirement account will be completely exempt and protected. So a person should not be concerned about losing their 401K or retirement fund when filing either an individual bankruptcy or a joint bankruptcy.
Will my employer or landlord find out about my bankruptcy? Bankruptcy petitions are generally a thing that your employer or landlord will not find out about. However, bankruptcy petitions are public record, so they are on record in your public administrative offices that you have filed a bankruptcy. It will also be on your credit report.
However, notice of the bankruptcy generally will not be sent to your landlord or your employer. This is in a Chapter 7. In a Chapter 13, lots of times what is called a payroll control order is put into place and that will basically be a way for the creditors to be paid through the bankruptcy courts by way of the trustee, through your employer. So in that regard, your employer will know about the bankruptcy if you elect to have a payroll control order in place. But generally speaking, your employer and your landlord will not know that you decided to file bankruptcy.
When will I be able to get credit again? After filing bankruptcy and receiving a discharge, you will have to re-establish your credit by paying your debts and bills on time after your bankruptcy. Any credit or debt that you’ve incurred or obtained after filing the bankruptcy will have to be paid back, and as long as you pay back those bills, your credit will again start to – your credit rating will start to improve.
But in order to get that credit first, creditors will generally send you applications within six months after receiving your bankruptcy discharge. In some cases, people have received not only credit cards within six months, but also have received mortgages within two years of filing and receiving a discharge in bankruptcy. What is good to know is the ability to receive credit again is a case by case scenario with the debtor and the creditor. A creditor has the right and has the option to loan credit to somebody even if they’ve filed bankruptcy. Like I said, this is a case by case scenario with the creditor and the debtor.
If you are asking yourself, should I file for bankruptcy, do not let the fear of future credit cloud your decision. You will be able to get credit again shortly after filing.