In the situation of a financial crisis, bankruptcy may be the only door open for you for a debt-free life. But nothing comes only with benefits. Bankruptcy has both positive as well as negative consequences. Not only during the case, but even later, bankruptcy will affect your life financially.
1) Types of Bankruptcy
Most people file for bankruptcy either under Chapter 7 or Chapter 13. In chapter 13, the debtor needs to file a plan as to how they schedule to repay monthly debts, or parts of it, from the income at present over 5 years. In chapter 7, you don’t need a payment plan, however, you might have to give up on a property you own so that it can be sold and your creditors can be paid. Exemptions can be used to protect some of your assets. Chapter 7 filing is advantageous in certain ways, as it does not require a repayment plan, and there is no limit on the debt you have.
2) Discharge from Bankruptcy
An advantage you get with filing for bankruptcy is, after completion of the payment plan for chapter 13, or after applying for chapter 7, you get a discharge. This discharge acts as a weapon for you. Your creditors, throughout their lives, can never bother you for repayment of debts included in the bankruptcy. Chapter 7 Bankruptcy gives you a fresh start. There are some debts, that even after filing for bankruptcy you may have to clear. However, you will be informed about them prior. The discharge in the case of chapter 7 can occur within 3 months of applying.
3) Your Credit and Bankruptcy
In your credit report, chapter 13 Bankruptcy will appear for 7 years and chapter 7 for 10 years. Do not easy, but if you have a good amount of income over your expenses you may be able to reach establish your credit again.
4) Bankruptcy and employment
A good thing about the law is that even after filing for bankruptcy your employer is prohibited to fire you. However, when looking for a new job if an employee runs a credit check on you, you may have to explain why you filed for bankruptcy.
A good attorney is all you need to file for bankruptcy with accuracy. Don’t compromise on your attorney under any circumstances. You can also contact Recovery Law Group from Los Angeles & Dallas, TX for the Same. Contact – (888-297-6203).