Featured News 2013 Bankruptcy FAQ

Bankruptcy FAQ

Are you feeling as though you are sinking in debt, and feel as though there is no way do get yourself out? If so, you are not alone! Financial struggles are a way of our society, and debt can come through many different circumstances in life. No matter how you got to this place of unimaginable debt, what is most important now is how you choose to get yourself out of it. Perhaps you have considered the option of bankruptcy and yet are still very concerned as to whether it is the best option for you or not? Here are a few frequently asked questions about the topic of bankruptcy that just might help you to see the benefits of choosing to take control of your pocketbook, and ultimately your life, again.

What is bankruptcy? Bankruptcy is the process in which people or companies who are dealing with debt are able to either reorganize or wipe away their debt by way of a court order. It acts as a legal protection between you and the countless creditors that likely haven't stopped calling, demanding their repayment. Depending on what sort of debt you are in, and how deep, will determine which Chapter you choose to file for. This option was determined by the Federal Government to create a way to help those individuals struggling with debt and to have the chance to start over again. Debt can be accrued for a number of reasons, either by choice or an unplanned hardship such as a severe illness, accident, loss of work, etc. Because of this bankruptcy has been established as a means of offering people the chance to get back on track.

Do I need to file for bankruptcy? Believe it or not, there are many individuals who consider the option of bankruptcy and then after meeting with an experienced bankruptcy attorney they then realize that there are other options that may work better for them. For example your attorney may show you that debt consolidation or another option is available instead. For this very reason, it is absolutely essential to contact a bankruptcy attorney in your area. When dealing with your finances and your future you want to make sure that you are receiving credible advice, which can be found in an attorney.

Can I keep my property? This is one of the most common concerns when addressing the topic of bankruptcy. And in most cases, people are able to keep their homes and other property in the event they choose to file for bankruptcy. There are specific exempt assets that can be taken away by creditors because of your debt, however thinks like your household items, your retirement accounts, a car, and etc. people are able to keep within reason.

What assets are considered exempt? When filing for bankruptcy you are choosing to acknowledge your debt and take action, and many people are often conserved they will lose everything in the process. Be encouraged, there are many assets that are considered to be exempt in this process. This would include, in most cases, your car, home, household goods, food, etc. Discuss your concerns with your attorney in order to determine if you have any assets that may be considered non-exempt. This may include if your family has more cars than each person needs, and the like.

Will creditors leave me alone? If you are dealing with debt it is very safe to assume that you are receiving frequent phone calls, emails and letters from creditors seeking their repayment. This can be overwhelming and quite honestly, become inappropriate with how much they are contacting you. When you choose to file for any chapter of bankruptcy, you are then legally protected by the government from creditor harassment. This starts the same date that you choose to file, therefore protecting you from the bombarding phone calls. Another important aspect to consider is that not only will they be unable to harass you, you will also be protected from them filing a lawsuit against you for the money you owe them.

I am married, does my spouse have to file, too? Bankruptcy is a single person process, so no, they will not have to file as well. However there is a downside when you are married, because even if only you file for bankruptcy, your spouse's credit will likely be affected. Because of that reason, you will want to discuss with your attorney as to whether or not it will actually be in their interest to have both of you file for bankruptcy together. This would then protect them from creditors going after them for your old debt, as well. It is also good to know that your spouse has the complete freedom to choose whether or not to file, just because they are married to you doesn't mean they need to file as well.

How will this affect my credit? Another common concern and hesitation for bankruptcy is the affect it will have on your credit score. First off, if you are even considering filing for credit it is very likely that your credit score is far from where it should be; and bankruptcy is a way to help bring it back up over time. If you are just swamped with debt, though making consistent payments, then yes, bankruptcy would hurt your credit. However, in most cases your debt has likely already negatively affected your score therefore making bankruptcy that next step to recovery.

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