Filing for bankruptcy is time taking process that will require a lot of hard work from your side too but it might be the best solution for you if you have a lot of debt and want to start a new fresh life.
Some of the benefits of filing for bankruptcy are-
- It stops collection efforts or harassment of the creditors.
- It stops debt lawsuits from creditors.
- Stopping Wage garnishment (your creditor taking payments directly from your paycheck)
- Stops foreclosure if your property is not yet sold.
- It also stops repossessions of some property( in chapter 13 bankruptcy mainly)
- Will get rid of debts (especially in chapter 7 bankruptcy)
- Protect your property.
- Stops your debt from growing and gives you a fresh new life.
Is filing for bankruptcy a good idea for you?
There are various factors to consider in whether or not to file for bankruptcy. It is a serious topic and should be decided with a help of a good bankruptcy attorney. Here are some factors that should be looked into-
- The impact on your future ability to access credit, lender, or low-interest rates.
- How many assets will you lose?
- The impact of your filing on your credit report.
- The time spent filing as well as the expense that comes with each type of bankruptcy.
- What types of bankruptcy chapters are you qualified for?
- Whether you can retain valuable assets from repossession.
Except these you also need to look that which chapter is better for you, you might be qualified for 2-3 chapters but which one gives you the maximum benefits? Some chapters might-
- Are not able to discharge credit card debts.
- It May affect your pension plan or some assets.
- Can create a financial issue for co-signer.
- Stops foreclosure.
- Can feel like an invasion of privacy due to the bankruptcy trustee or the bankruptcy court.
These are a concern but some are manageable rather than staying in a life where you have excess debt. A bankruptcy filing will give you a fresh start in your life and give you a secured financial future.
What happens after a chapter 7 bankruptcy filing?
Those who file chapter 7 must be aware that a lot of debts cannot be discharged. Some of them are listed below-
- Government-funded student loans. (even private loans are rarely discharged)
- Child support
- Certain types of tax debt
- Federal tax liens
- Cooperative housing fees
- Certain tax-advantaged retirement plans
- Fines and penalties for criminal acts.
Solving bankruptcy problems.
After the bankruptcy, you might face a few issues. You will have to look into your credit report to identify any false statements from your former creditors, if so you will have to contact your creditor or even credit bureau. Except for this, there are a few issues like-
- Higher interest rates
- Have higher down payments.
- Need to produce a co-signer when attempting to secure new credit.
But these are not the end of the world, you can always rebuild your credit score.