If you have a serious amount of debt, you may have heard that you can file for bankruptcy but do not know how. Also, you may wonder whether or not it is the right move for you. Whether you are having financial hardships and want to file or just need to learn more to help out a friend or family member, here are some straight facts about what bankruptcy is and does.
1) How do I know if I should file for bankruptcy?
Whether or not you should go for broke with bankruptcy filing depends on a few things. For one, consider the sort of bills you have that are causing you grief. Is it reoccurring expenses like child support, back taxes from recent years or massive student loan burdens? If so, sadly you may have to find another way to manage these costs, because bankruptcy does not erase them.
If the kind of debt you are dealing with involves purchase-type expenses, like medical bills or credit card debt, and creditors are suing you, you are definitely going to want to hire some experienced bankruptcy lawyers and consider filing. You may have the option of filing for two kinds of bankruptcy: Chapter 7 (the most frequently filed for) or Chapter 13.
2) What are the cons of filing for bankruptcy?
Bankruptcy is serious business, and isn’t just a financial “get out of jail free�? card. The disadvantages are stark; they can include losing your home, car and other treasured belongings. This depends a great deal on which state you live in (as some states have more items included in bankruptcy exception laws) as well as whether or not you have a job. Your credit will be damaged, at least temporarily, by filing for bankruptcy, and you may have a difficult time taking out loans or securing a line of credit in the future.
3) What are the pros of filing for bankruptcy?
There are also some benefits to filing for bankruptcy for those who do. One immediate pro is that you won’t have to listen to calls from harassing creditors anymore. Another big plus is that your credit card debt will be wiped out, and you can start anew in terms of what you owe in that category.
If you have a good job, Chapter 13 bankruptcy can be a smart choice because it will usually allow you to keep all of your personal property; you simply need to agree to pay some of the debt back within 3-5 years.
Jessica writes about a wide variety of topics. She especially enjoys writing about finances. You can learn more about Bankruptcy Lawyers at http://www.legalhelpers.com/