Bankruptcy is a serious decision that should not be taken lightly. If you are considering filing for bankruptcy, it is important that you check the facts about what this will mean for you and your future. In this blog post, we will discuss three important things you need to know before making the decision to file for bankruptcy.
Bankruptcy Fact #1
First and foremost, it is important to understand that bankruptcy will have a major impact on your credit. If you file for bankruptcy, your credit score will drop significantly. This can make it very difficult to get approved for loans or credit cards in the future. Additionally, you may find it difficult to rent an apartment or buy a car.
Bankruptcy Fact #2
Secondly, you need to be aware of the different types of bankruptcy. There are two main types of bankruptcy: chapter seven and chapter thirteen.
• Chapter seven bankruptcy is also known as liquidation bankruptcy. This type of bankruptcy allows you to discharge most of your debts. However, there are some debts that cannot be discharged through this type of bankruptcy. These include child support, alimony, student loans, and certain taxes.
• Chapter thirteen bankruptcy is also known as a reorganization bankruptcy. This type of bankruptcy allows you to repay your debts over three to five years. During this time, you will be required to make monthly payments to your creditors. At the end of the repayment period, any remaining balances on your debts will be discharged.
Bankruptcy Fact #3
Finally, it is important to understand the consequences of filing for bankruptcy. When you file for bankruptcy, an automatic stay is placed on all collection activity against you. This means that creditors are not allowed to contact you or take any action to collect on your debt. However, this does not mean that your debt has been forgiven. You will still be responsible for repaying any debts that are discharged.
If you are considering filing for bankruptcy, it is important that you consult with an experienced bankruptcy attorney and a credit repair specialist so you can truly weigh the risks, rewards, and costs associated with the tough decision. They can help you understand the process and what to expect. Additionally, they can help you determine if bankruptcy is the right option for your unique situation.