Look. It’s okay. It sucks that you have to do it, and you might feel awful, but sometimes declaring bankruptcy is the best way out of a bad situation. Filing for Chapter 7 bankruptcy feels like the end of the world that you’ve worked so hard to build, but in a lot of cases it can give you the chance to start over.
WHAT DECLARING BANKRUPTCY CAN DO AND CAN’T DO
Bankruptcy Can…
- Help you keep most of your property, though you might have to give up some luxury goods if you have any.
- You will be able to keep your earnings and property you buy after you file for Chapter 7.
Bankruptcy Can’t…
- Unless it’s an exceptional case, Chapter 7 will not get rid of student loan debt.
- Short of a court order, you will still be required to pay child and/or spousal support.
- Save your credit cards – kiss them good bye.
Filing a Chapter 7 discharges most forms of unsecured debt such as:
- Credit card and revolving balances including over limit charges and late fees.
- Accounts currently in collection.
- Medical bills, though some debts may remain.
- Payday loans – unless obtained fraudulently or within a term of time after filing for bankruptcy.
- Bad checks – unless issued with intent to defraud.
- Business debts.
- Past due rents.
- Back taxes – under certain circumstances.
- Utility bills.
- Insurance claims – except those incurred in a DUI case.
- Government assistance overpayment clawbacks.
You’re not going to walk away unmarked. There’s still going to be attorney costs and court fees, and your credit rating is going to take a major blow. You’re going to have a hard time getting credit for six to ten years, and that could be further damaged if you need to file for bankruptcy again in that time. You are only allowed to file for bankruptcy every seven to ten years, so living within your means during those years is going to take some belt tightening and possibly some counseling with a professional who can help you learn to budget and prioritize. Also, remember that even looking for credit can have a detrimental effect on a credit rating already in a tailspin, so do not apply for additional lines of credit if filing for bankruptcy is even a possibility.
A bankruptcy is never a matter for you to undertake on a DIY basis. The process is complex, and retaining an attorney who specializes in bankruptcy or even consulting with a lawyer at Van Horn Law Group can save you hassles, money, and property. Postponing bankruptcy when you really need it can actually let you get into more of a mess as defaults and delinquencies pile up and up. If you’re not certain whether or not to file, bring your documentation to a qualified attorney and let them evaluate your situation.
Bankruptcy is nothing to be ashamed of, it can happen to anyone, especially in precarious economic times when even the middle class are stretching to keep it together. Get your free case evalution today.