- Bankruptcy will reduce or eliminate your debt based on the type of bankruptcy you qualify for. Chapter 7 will eliminate almost all debt, while Chapter 13 will reduce your debt and place you on a re-payment plan that you can afford.
- A bankruptcy petition must be filed to begin the bankruptcy process. The petition must be filled out accurately and honestly. Any petition that is found to be incomplete or has information withheld can cause the bankruptcy case to be dismissed. If you have intentionally withheld information, you could even be charged with perjury. Include all of your assets and all of your debt on the petition even if you wish to reaffirm a debt.
- Accounts with zero balances do not need to be entered on the bankruptcy petition.
- Even if you do not have to include a zero balance account, the account may still be closed. Creditors often review credit reports on a routine basis to evaluate your credit report for possible increases or credit decreases. When a creditor sees you have filed bankruptcy, he may very well close the account or at least reduce the credit limit. Do not count on the fact that you do not have to disclose the account will remain at your disposal.
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