Most Common Questions Related to Bankruptcy Answered

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Most Common Questions Related to Bankruptcy Answered

Though bankruptcy is a legal method of getting rid of debts, there are various misconceptions attached to the entire process. It doesn’t help with people being confused due to lack of authentic knowledge regarding the process. There are various queries related to the process, which generally remain unanswered, says Dallas based bankruptcy law firm Recovery Law Group, adding further fuel to fire. Here are some of the most common questions related to bankruptcy answered by professionals.

Can I file for bankruptcy without a lawyer?

Though filing for bankruptcy without a lawyer is allowed, yet it is not recommended as there are several legalities and paperwork. A novice who has no experience in the field might end up missing filing any important documents, which may lead to the case being dismissed, or a debt being omitted from discharge, etc. Therefore, it is important to seek consultation from experienced bankruptcy attorneys and hire one to get rid of your debts. You can consult with bankruptcy lawyers at 888-297-6023 to know more about your case.

Which chapter of bankruptcy would best suit my needs?

Individual debtors can file for bankruptcy under Chapter 7 or Chapter 13. However, before deciding on which chapter would best suit your needs, the attorney needs to consult with you with respect to your assets, income, debts, creditors, your transactional history, etc. If you wish to get a quick discharge for your unsecured nonpriority debts, Chapter 7 is your best chance. However, if you wish to retain all your assets, you might end up choosing Chapter 13 where you can repay your debts over a period of 3 to 5 years.

Are all my debts discharged in bankruptcy?

Your debts are categorized into two – secured and unsecured debts. While the former has an asset attached with the debt, such as house mortgage, automobile loan, etc., the latter does not have any such benefit. Since the creditor of secured debt can get their dues by repossession or foreclosing on the property, these debts are generally not discharged during bankruptcy. Unsecured debts can be priority ones like alimony, child support, certain taxes, and student loan debts or nonpriority like medical bills, credit card bills, utility bills, personal loan, etc. unsecured priority debts are also not discharged during bankruptcy. Filing for bankruptcy can get rid of your unsecured nonpriority debts.

Will I lose all my assets in bankruptcy?

Both state and federal government offer exemptions to protect assets of the bankruptcy filer. Since bankruptcy is meant to be a way to give people fresh financial start, they have the right to retain equity in their belongings. You are exempted up to a fixed amount of equity in your home, vehicle, household items, pension accounts, some personal property, etc.

What happens to my credit rating?

Bankruptcy is reflected in your credit history and remains so for nearly 10 years. Though it lowers your credit rating, yet it is a boon for people who have been struggling to make ends meet. You can easily improve your credit rating after bankruptcy by seeking financial counseling and making timely payments on your bills, avoiding loan for a couple of years and living within means.