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Browse our list of Frequently Asked Questions, arranged by category:

What happens if I file bankruptcy?

There are two types of bankruptcy available to most people. If you file Chapter 13, you may keep a mortgaged house or car. Rather than surrender property, you may pay off your debts over three to five years.

Filing bankruptcy under Chapter 7 requires you to surrender all assets that are not exempt in your state. Exempt property may include items such as basic household furnishings and work-related tools.

Both types of bankruptcy may get rid of debts where creditors have no specific rights to property and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Bankruptcy usually does not wipe out child support, alimony, fines, taxes, and some student loan obligations.

How long does a bankruptcy stay on my credit report and how does it affect my credit?

Under the Fair Credit Reporting Act — a federal law — a bankruptcy can remain on your credit report for up to 10 years and won't clean up a bad credit record.

If I need legal advice on filing bankruptcy, and don't have the money to pay for an attorney, what should I do?

You can contact the local bar association, legal aid services, or a university law school with a legal assistance program for a referral to an attorney.

What happens at my session with a Certified Consumer Credit Counselor?

The counselor will review your financial situation in a non-judgmental manner and provide possible solutions. He/She will help you develop a spending plan that covers your living expenses and payments to your creditors.

Are Consumer Credit Counselors qualified? What are their backgrounds?

Our Consumer Credit Counselors are specially trained and independently certified through TestTutor, Inc. They typically have backgrounds in finance and/or counseling.

Is counseling confidential?

Absolutely. Our Certified Consumer Credit Counselors do not discuss a client's financial situation. Client records are maintained in secure facilities.

Can a Certified Consumer Credit Counselor give legal opinions on my options?

No. Only an attorney can provide opinions about legal issues.

Credit

How do I establish credit?

You need a steady work record and continued residence at the same address. If you do not have a checking account, open one and be careful not to bounce checks.

You may apply for credit at a local department store or credit union. You might also consider a secured credit card, which requires you to deposit money as security for the charges you make on the card.

Where can I get a copy of my credit report? How much does it cost?

You can get a copy of your credit report by contacting the three major credit reporting agencies.

Can you fix my credit report or clean it up?

No. If negative comments on your credit report are correct, they can remain in your file for up to seven years—except for bankruptcy, which can remain for up to 10 years.

If you believe there are errors in your credit report, you must notify the credit bureau in writing. The bureau will follow up your request with your creditor. If the creditor agrees with you, your report will be changed.

What is the Fair Debt Collection Practices Act (FDCPA)?

It's a federal law that protects consumers from harassment or threats made by creditors and prohibits creditors from making false statements. This law also prohibits a debt collector from disclosing what you owe to anyone but your attorney.

What is a "charge off?" If my debt has been "charged off," can a creditor pursue collection?

When an account is considered uncollectable, a creditor will write it off as a bad debt or "charge off." Depending on each creditor's policy, a "charge off" will occur between 90 to 180 days after you become delinquent.

However, a creditor can still pursue collection of the debt after a "charge off" and it will also be reported to the credit bureaus.

My car was repossessed and resold. Am I liable for the difference between what the car sold for and what was owed?

Yes. If not paid, the creditor may initiate legal action for the difference between the sale price of the car and what you owed.

What is a judgment?

A judgment is a decision issued by the court at the end of a lawsuit. If you are sued and either don't file papers or file papers but eventually lose the case, the person who sued you will get a judgment.

Most creditors need a court judgment to attach your wages or put a lien on your property.

My wages have been attached. What does that mean?

When your wages are attached or garnished, a sum of money is deducted from your paycheck and sent to the creditor.

Wage attachments are a common method used to collect a court judgment or back owed child support.

Who is responsible for debts after divorce?

You will need to talk to an attorney about this question.

*Courtesy of debtadvice.org