Bankruptcy can be a complex and intimidating process for those who are struggling with debt. There is often confusion surrounding the procedures, implications, and potential outcomes of filing for bankruptcy.
This article aims to provide answers to some of the most frequently asked questions about bankruptcy to help you better understand your options and make informed decisions.
Bankruptcy is a legal process that allows individuals or businesses struggling with unmanageable debt to seek relief and have a fresh financial start. The goal of bankruptcy is to allow the debtor to eliminate or restructure their debts while providing creditors with a fair opportunity to recover some of the amounts owed.
There are several types of bankruptcy, but the most common ones for individuals and businesses are:
Filing for bankruptcy should be considered when your debts become unmanageable and other options such as debt settlement, consolidation, or negotiation are not viable. Before deciding, consult with a bankruptcy attorney to review your financial situation and determine if bankruptcy is the most suitable solution for your circumstances.
Not necessarily. In a Chapter 7 bankruptcy, certain assets are exempt, meaning you can keep them. Exemptions vary by state and may include items such as your primary residence, a certain amount of personal property, or a vehicle. In a Chapter 13 bankruptcy, you generally keep all of your assets as long as you adhere to the repayment plan.
Bankruptcy will have a negative impact on your credit score. A Chapter 7 bankruptcy will remain on your credit report for ten years, while a Chapter 13 bankruptcy will remain for seven years. However, the impact of bankruptcy on your credit score lessens over time, and you can take steps to rebuild your credit after filing.
While bankruptcy can discharge many types of debts, there are certain debts that cannot be eliminated. These non-dischargeable debts include student loans (except in rare cases), child support, alimony, and certain taxes.
The cost of filing for bankruptcy includes court filing fees and attorney fees. For Chapter 7, filing fees are approximately $335, while Chapter 13 fees are around $310. Attorney fees vary based on your location and the complexity of your case.
The duration of the bankruptcy process depends on the type of bankruptcy you file. A typical Chapter 7 case takes 4-6 months from filing to discharge, while a Chapter 13 case lasts for the duration of the 3-5 year repayment plan.
Filing for bankruptcy is a significant decision with long-lasting implications. Understanding the process and potential outcomes is essential to making the best choice for your financial future. If you have further questions or need guidance, it is recommended to consult with a bankruptcy attorney to navigate your specific situation.
At Blue Bee Bankruptcy, our lawyers are highly experienced in bankruptcy options. More importantly, we understand that each case we receive is unique and each client has different needs and goals. We will discuss these signs with you and decide the best route to take.
We strive to help our clients rebuild their lives and take steps toward a better financial future through filing.
If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.
Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!