If you are considering filing for bankruptcy, it is in your best interest to learn everything there is about the process. This way you can be sure you are make the best choice for you and your future. This article is going to give you an overview of bankruptcy and things you need to consider before filing. Keep in mind talking to a local bankruptcy attorney is highly recommended for specific question regarding your personal situation.
Is bankruptcy right for you?
This is the first question you need to consider; everyone’s situation is unique. Bankruptcy can give you a fresh start and take away the stresses of overwhelming debt. But it isn’t a cure all and does have lengthy side effects. After filing for bankruptcy it will be 7 to 10 years before it is off your credit and you will have to wait 3 years to be approved for any kind of loan. Also you need to learn from your mistakes, yes bankruptcy will get rid of your debt, but if you don’t learn from the mistake, you may find yourself in the same situation a few years later.
Before Filing for Bankruptcy
It is important to learn about the bankruptcy process, the so-called pros and cons, before you actually file. Spending time doing online research, join bankruptcy forums to hear about peoples different experiences. Look into alternative bankruptcy options and talk to debt consolidators. Learn about what life after bankruptcy will be like. Bankruptcy can be considered as a debt relief option, but it should be considered very carefully before you decide on taking it.
Filing For Bankruptcy
You should take it account how much overall debt you have, versus your yearly take home income. If your debt is significantly more than you can handle and will take you an unreasonable amount of time to pay off, filing now may be the right option. Also if you have tried debt relief programs and they have not been able to help, it is time to talk to a bankruptcy lawyer and see what they can do for you.
When you file for bankruptcy, and you receive a discharge you debt will be taken care of and you won’t have to pay back most creditors. After you file for bankruptcy it can take seven years for it to come off your credit report.
Types of Bankruptcy
If you come to the conclusion that bankruptcy is the best solution for your debt problems, then it is time to start looking into the different types of options. In most individual cases, a chapter 7 filing is the most common “consumer” bankruptcy. With chapter 7 you liquidate assets to repay debtors.
Chapter 13 is another form that may work, this is known as the “reorganization” bankruptcy. It allows indebted individuals to reorganize their debts in an attempt to repay creditors. You must show a plan to repay them and have proof of a steady income.
Finally keep in mind that with bankruptcy, whichever option you choose will have repercussions. Do your research and talk to knowledgeable people in the field, before filing. Proper research, planning and analysis are necessary to find the correct answer for you personal situation.