4 Things You Should Know About Filing For Bankruptcy

Are you left with a small amount of money out of each paycheck due to paying back owed debts? If you are struggling to take care of all or your daily needs, the solution to the problem might be to file for bankruptcy. This article covers a few of the things you might want to know before bankruptcy is filed.

1. What Types of Personal Bankruptcy You Can File

Filing for bankruptcy is ideal because it will allow you to be forgiven of your debts to stop wage garnishment, or to make long-term payment arrangements with creditors. For instance, if you opt for Chapter 7 bankruptcy, you might not have to pay your creditors any money. However, it is also possible for some of your assets to be seized and sold to use the funds for paying creditors. Chapter 13 bankruptcy is an option that allows you to keep your assets and come up with a payment plan for paying off your debts within three to five years.

2. How Your Credit Score Will Be Affected

Your credit score will be lowered after filing for bankruptcy. However, you will be able to work on raising the score back up to a satisfactory number by not falling behind on bills again. You must also keep in mind that bankruptcy will remain on your credit record for 10 years with Chapter 7, and seven years with Chapter 13.

3. How Calls From Creditors Are Affected

After you have filed for bankruptcy, creditors will no longer be allowed to request that you pay them any money, including with Chapter 13 when you are making payments. If you continue receiving phone calls from debt collectors, you can take legal actions to make them stop and file a lawsuit for harassment. An automatic stay will go into effect as soon as you complete the process of filing bankruptcy.

4. Why You Should Consult With an Attorney

It is in your best interest to hire an attorney for assistance with filing for bankruptcy. He or she will help you decide whether or not Chapter 7 or 13 is best for your specific debt situation. For instance, sometimes Chapter 13 is recommended when you don't have many debts and can pay them off in small amounts per payment. An attorney will also calculate your debts and income to figure out if there is a good chance that a judge will approve your bankruptcy petition.

For more information, contact a bankruptcy attorney like those at Shoemaker & Dart P.S. Inc.

About Me

what my bankruptcy lawyer taught me

I took the leap and left the company that I had worked with for nearly fifteen years and opened a business of my own. Things went very well for the first few years, but when my health started going south, it became difficult for me to keep up with the workload. Eventually, I had to close my business and was left with no income and a whole pile of bills that I couldn't pay. After months of dealing with debt collectors calling my home every single day, I decided to talk with a bankruptcy attorney to find some help. Find out what he taught me right here on my blog.