Filing for bankruptcy is a complicated, emotional process. It requires more work and time than most people realize, but it can even be the right solution for significant debt issues.
The Honest Benefits of bankruptcy law firm
Consult with a bankruptcy legal professional or educate yourself on your options – you may find that filing for bankruptcy can help you out of a difficult financial bind.
Most filers find that bankruptcy eases stress by stopping:
Collections agency calls or harassment
Debt lawsuits from creditors
Wage garnishment (creditors taking money from your paycheck)
Foreclosure (unless the property has already sold)
Repossession of some property (in Chapter 13)
Bankruptcy will also:
Get rid of many debts (in Chapter 7)
Protect some property from for sale (depending on exemptions in your state)
Put an end to growing debt and present you a brand new learn to turn things around
Is Bankruptcy a Good Idea for You?
The decision to file for bankruptcy is a significant one. There are lots of considerations worth examining closely before starting out:
The impact on your future ability to gain access to credit, lenders, or low interest
The impact on your credit report
Whether you could lose assets (if you file for Chapter 7)
The dissimilarities in the time and expense associated with each form of bankruptcy
Whether you are eligible for certain varieties of bankruptcy
Whether you can retain specific valuable assets from repossessions (many states have exemptions)
Considering other impacts can be critical in deciding whether to seek bankruptcy relief or which form is an improved option. Some bankruptcies may:
Fail to discharge credit card debts
Impact your pension plans or other assets
Create financial issues for co-signers
Feel like a significant invasion of your personal privacy with the bankruptcy court and dealing with your bankruptcy trustee
Any of these concerns may impact the desirability of the relief provided. However, none of the reasons are worse than remaining in overwhelming debt or making your financial situation worse. Sometimes, you just need debt help and cannot make it happen alone. Bankruptcy will give you a fresh start, and you could work at the finances you want.
What Happens After a Chapter 7 Bankruptcy?
Those who pursue a Chapter 7 bankruptcy should become aware of some potential problems or concerns. Many kinds of debt can’t be discharged under Chapter 7 bankruptcy, including:
Government-funded student loans
Some varieties of tax debt
Federal tax liens
Alimony or spousal support
Debts for personal injury or death due to a car accident
Fines and penalties for violating regulations
Certain tax-advantaged retirement plans
Cooperative housing fees
Potential candidates for Chapter 7 bankruptcy must be aware that even private student education loans are rarely discharged without a special showing of undue hardship. This really is hard to prove but can occur if you feel permanently disabled and cannot work.
Solving Bankruptcy Problems
Following a bankruptcy, you may need to correct any inaccurate reports from former creditors. To get this done, you should have to engage in a process with the credit bureau.
This can entail contacting former creditors for verification of the satisfaction of debts. Even though these issues are resolved, those who have completed a bankruptcy can still expect to:
Pay higher credit rates
Have higher down payments
Need to produce a co-signer when attempting to secure new credit
These issues are not the end of the world. They may require using a mortgage broker when seeking to purchase a residence.
Even though it may be counterintuitive, there are advantages to bankruptcy when you have debts that you can’t pay. You’ll get a clean slate, and most negative outcomes will fade from your record within a couple of years. But regardless of whether you should file for bankruptcy is heavily reliant on an individual’s specific circumstances.
For this reason, it can be very beneficial to speak with a local bankruptcy legal professional who can clarify the huge benefits and downsides to filing for bankruptcy in your unique situation.