What You Need to Know About Filing Bankruptcy
Bankruptcy is not something that should be entered into lightly; it’s a weighty decision that can have massive ramifications if you don’t know what you’re doing, so take the time to educate yourself thoroughly before making any decisions.
Bankruptcy allows you to wipe away most of your unsecured debt, which means everything except child support, taxes and student loans, allowing you to get back on track financially in the future.
This guide will help you make an informed decision about bankruptcy and whether or not it’s right for you!
The Different Types of Bankruptcy
Depending on your income level and your financial obligations, you may be eligible for one of these forms of bankruptcy protection.
The type that you choose will affect how much time it takes for you to become debt-free and what benefits are available to you.
Most or all of your property is liquidated in order to pay off as many creditors as possible.
If you’re able to repay at least some of the money that you owe, then this might be the best option for you.
Plus, individuals with steady incomes propose a repayment plan to their creditors which lasts between three and five years.
How to File for Bankruptcy
If you find yourself with no way out, filing for bankruptcy can give you a fresh start. It will allow you to discharge your debts and start over with a clean slate, which is what many people need in order to get back on their feet.
The process takes time and there are certain steps that must be followed in order for the bankruptcy petition to be granted.
There is also some paperwork that needs to be filled out and filed before anything else.
In most cases, only debtors who owe less than $150,000 or have less than $1,000 in assets qualify for this type of relief from creditors.
If you’re considering filing for bankruptcy protection then it’s important to know how the process works so that you can make an informed decision about whether or not this option is right for you.
With the help of an experienced attorney, you’ll be able to determine if bankruptcy is something worth pursuing.
If you decide to move forward, keep in mind that all non exempt property will be taken into consideration when determining how much money a debtor has available to pay off creditors.
The Pros and Cons of Filing Bankruptcy
Filing for bankruptcy is a decision that needs to be thought out carefully.
There are pros and cons of filing for bankruptcy, and it’s important to weigh your options before deciding if this is the best course of action.
You might be thinking that filing for bankruptcy is the only way out of your financial troubles, but before you make such a big decision, consider the following pros and cons.
1) If your income has been drastically reduced or eliminated, filing for bankruptcy could give you relief from continuing to pay on debt.
2) With a large student loan or medical bills with high interest rates, bankruptcy may save you from making payments every month until retirement.
3) The downside to this is if you are a homeowner, filing for bankruptcy can mean losing your home as well as any other assets.
4) It’s important to consult an attorney before deciding whether this is the right course of action for you.
If you decide that bankruptcy is the best decision for you, then make sure you do it correctly by getting legal advice from an experienced attorney.
The big question is: Which side will you choose? Will it be the money you’ll save on bills or paying off debt, or will you take on even more debt in order to start fresh with a clean slate?
As with most things in life, everything has its upsides and downsides.
It all depends on how you see things! Some people might see saving money as being pro saving the most amount of their hard earned cash.
How to Rebuild Your Credit After Bankruptcy
It is important that you begin rebuilding your credit as soon as possible. Luckily, there are a number of ways to do this.
One way is by opening a secured credit card. This type of card requires an upfront deposit, which acts as the credit limit for the account.
It also has lower fees and rates than unsecured cards, making it easier for you to get back on track with your finances.
Another way to rebuild credit after bankruptcy is to go through the process of paying off any old debt you may have left over from before filing bankruptcy.
As long as you continue making payments on time, creditors will report these payments to the three major credit bureaus – Equifax, Experian, and TransUnion.
In addition to new accounts that you open after getting out of bankruptcy. Over time, your score should gradually improve.
Keep in mind that while bankruptcy can provide relief from overwhelming debts, it can take years to fully recover financially.
In the meantime, try not to spend more money than you make each month.
What Happens After You File for Bankruptcy
After you file for bankruptcy, the court will either approve or deny your petition. If it’s approved, the court will issue a discharge order that releases you from all debts.
If it’s denied, you may be able to file an amended petition.
The time frame for this process varies depending on the complexity of your case and how quickly you can gather the necessary documentation and paperwork.
During this time, creditors cannot contact you or try to collect debt payments from you.
however, they can still sue you in civil court if they have good reason to believe that there is more money available than what was provided in the bankruptcy filing.