Things To Know About Bankruptcy
Filing for bankruptcy can feel overwhelming, but it’s a path many people take to regain financial stability. Knowing the key facts can help you navigate the process with more confidence. Here are five important things to know if you’re considering filing for bankruptcy.
#1. Bankruptcy Offers Different Options
There are several types of bankruptcy, with Chapter 7 and Chapter 13 being the most common for individuals. Chapter 7 involves liquidating non-exempt assets to pay off your debts, while Chapter 13 sets up a repayment plan that allows you to keep your assets. It’s important to understand which option is best for your situation, as it will affect the outcome of your case. Your lawyer can attest to the importance of choosing the right type of bankruptcy based on your unique financial circumstances.
#2. Not All Debts Are Dischargeable
One common misconception about bankruptcy is that it eliminates all your debts. While bankruptcy can wipe out many types of unsecured debts, like credit card balances and medical bills, some obligations, such as student loans, child support, and certain tax debts, typically cannot be discharged. A lawyer, like a bankruptcy lawyer, knows it’s essential to have a clear understanding of which debts will be affected by filing so you can plan accordingly.
#3. Your Credit Will Be Impacted
Filing for bankruptcy will have a significant impact on your credit score. A Chapter 7 bankruptcy can stay on your credit report for up to 10 years, while a Chapter 13 bankruptcy remains for up to seven years. However, while your credit score will take a hit, bankruptcy can also be the first step in rebuilding your financial life. You may be able to start improving your credit soon after your case is resolved by using credit wisely and demonstrating responsible financial behavior.
#4. The Bankruptcy Process Takes Time
Bankruptcy isn’t an overnight fix; the process can take time. A Chapter 7 case typically takes about three to six months from filing to discharge, while Chapter 13 can last three to five years due to the repayment plan. Understanding that bankruptcy is a process can help you prepare mentally and financially for what lies ahead. Patience and careful planning will be your allies as you work through the requirements.
#5. Legal Guidance Is Essential
Navigating the complexities of bankruptcy law can be challenging, which is why having experienced legal guidance is crucial. An attorney can help you decide which type of bankruptcy is right for you, assist with filing paperwork, and ensure that you meet all necessary deadlines.
Help Is There When You Need It
If you’re considering bankruptcy, understanding these essential facts can help you make informed decisions and approach the process with more clarity. Our friends at Darrell Castle & Associates discuss how having knowledgeable legal support can make all the difference in achieving a successful outcome, allowing you to focus on moving forward with your life.
Reaching out to a qualified attorney can provide you with the guidance you need to navigate bankruptcy with confidence and get back on the path to financial stability. Schedule a call today.