Friday, November 7, 2014

Top 3 Things No One Tells You About Bankruptcy


bankruptcy
By: StockMonkeys.com via Flickr
Is bankruptcy the right solution to your financial woes?
If you are feeling at the end of your rope financially, you likely have a lot of questions, and with good reason. Bankruptcy, which some attorneys tout as the be all, end all solution to overwhelming debt woes, is a complicated process that is made even more complicated by the things that many people don’t tell you. Before you decide whether filing for bankruptcy is your best option, take the time to learn more about some of the lesser-known aspects.

Bankruptcy Is Not a Cure-All


This is one of the biggest things anyone who is considering bankruptcy needs to understand. While it does provide a major degree financial relief, bankruptcy does not eliminate all debts. Bankruptcy does not wipe out

  • The vast majority of student loans
  • Recent delinquent taxes
  • Child support
  • Alimony
  • Fines and penalties, such as speeding tickets
That being said, bankruptcy does discharge many types of debt, including unsecured credit card debt and unsecured medical bills in most cases. It is important to note, though, that sometimes creditors can convince the judge that certain debts should not be eliminated due to the method by which the debt was obtained. For example, if you received a credit card by providing fraudulent information on the application, the debt might not be eliminated when you go through bankruptcy.

You Have to Keep Up With Payments


If you file for Chapter 13 bankruptcy, you will be put on a payment plan to repay you debtors. This plan is set up through the courts, and if you are in one of these arrangements, you have to make your payments in full and on time. Missing just one payment can cause your Chapter 13 bankruptcy to change to a Chapter 7, meaning your personal assets are no longer protected and can be sold off to pay your debts. Missing a payment could also lead to the bankruptcy being dismissed altogether. In either case, the outcome can be disastrous, so keeping up with your payments is absolutely critical.

If you file for Chapter 7, you still need to keep up with payments on secured possessions, like your house or car, during the bankruptcy proceedings. Because bankruptcy immediately stops debtors from contacting you, you might not receive a bill for several months. Just because it isn’t showing up in your mailbox, though, doesn’t mean you don’t need to keep paying it.

It Can Stay on Your Credit Report for Up to a Decade


Filing for Chapter 7 bankruptcy allows you to discharge a lot of your debt to get a fresh start quickly. It is important to note, though, that just because your debts are gone doesn’t mean you get a totally clean slate. Bankruptcy stays on your credit report for 7 to 10 years, so if you file, be prepared to have a hard time obtaining credit for up to a decade.

It’s good to know, though, that having a bankruptcy on your report does not make it impossible to obtain financing. You can still get a secured credit card, which is a good way to help rebuild your credit. Home loans are very difficult to come by immediately following bankruptcy. Car loans are difficult to obtain through traditional lenders, but there are many businesses and organizations that offer financing despite a rocky credit history.

Not all bankruptcy attorneys are particularly forthcoming when it comes to fully explaining the bankruptcy proceedings or the options available to debtors. When you contact me, my staff and I will be happy to help you throughout the entire process, from determining your best course of action to receiving your discharge. Give The Law Offices of Eric L. Nesbitt, P.C. a call to schedule your consultation today.

Eric L. Nesbitt, Esq.
Law Offices of Eric L. Nesbitt, PC
Phone 303-741-2354
Email Us
Nesbitt Law Offices Website

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