To acquire credit when in a bankruptcy, you have to show an increase in income or a decrease in expenses claims Lincolnshire bankruptcy lawyer. This is where we sit down and look at Schedule I which is income and Schedule J which is expenses and we see if there are any adjustments that can be made after the case has been filed. For example, the debtor might have had a slight raise. The debtor might have taken on a part-time job. The debtor might be receiving assistance from a family member. The debtor might be receiving assistance in terms of somebody paying rent or renting a room.
In terms of expenses, we want to look at the budget and see what has changed from the time of claiming bankruptcy to the time we bring the Motion to Incur Additional Credit. Does the debtor still have all those expenses that are listed in Schedule J? It’s possible that the debtor was paying on some sort of debt outside of the bankruptcy that they no longer have. It’s possible that their rent has gone down. It’s possible that they no longer have school expenses. It’s possible that they no longer have child care expenses. It’s also possible that they cut down on some of the extracurricular or entertainment expenses. So we have to be able to prove to the court that not only is the credit fair, in other words it’s a fair deal and the debtor is not getting ripped off but we also have to show the court how the debtor can make that payment outside of the bankruptcy Chapter 13 going forward.
So credit after bankruptcy or while in the bankruptcy is very possible. For Chapter 7, it simply waiting on a certain timeframe after filing and the credit offers will come through the mail. In terms of Chapter 13, to incur additional credit while you are in the case, there are additional steps of getting court approval.
After the Chapter 13 case is over, then there obviously is no court approval necessary and the debtor can seek out the best deals possible. Just like in a Chapter 7, the Chapter 13 bankruptcy client is going to receive offers after the Chapter 13 has gone to a conclusion. Caution to the debtor is that you need to look at these deals, see if they are fair, see what kind of interest rate they are being charged and see what the annual fee is. Also, check with your bankruptcy lawyer and get his opinion on the deal.