If your finances have taken a turn for the worse, it’s natural to search for any answer that can bring relief to your life. While you may not want to entertain the idea of bankruptcy just yet, it’s never too early for advice on this matter.
As you learn more about bankruptcy, you may come to find that it’s exactly what you need to get back on track. Even if you don’t push forward just yet, the information you collect could come in handy in the future.
As you obtain bankruptcy advice, you can use it to make financial decisions that put you on a better path. Here are five things you need to know about bankruptcy:
- There are two types for individuals: There are two primary types of bankruptcy for individuals, Chapter 7 and Chapter 13. Both of these have pros and cons, so compare the details to decide which option is best and which one (if not both) you qualify for.
- You won’t lose everything: Many people believe they’ll lose everything if they file for bankruptcy, but this isn’t true. There are exemptions that allow you to keep some assets, even if you have to part with others. With Chapter 13 bankruptcy, you’re able to repay some or all of your debt through a repayment plan, which often allows you to retain all your assets.
- Student loans stay with you: There are rare circumstances when student loans are discharged in bankruptcy, but this doesn’t happen often. You should expect this debt to remain with you after your filing.
- A bankruptcy remains on your credit report for 7 or 10 years: A Chapter 7 bankruptcy remains on your credit report for 10 years, while a Chapter 13 remains for seven years. This can make it difficult to secure a loan in the future, such as to purchase a vehicle or home.
- It can stop foreclosure: If you’ve received a foreclosure notice from the bank, a bankruptcy and the automatic stay can stop the repossession process dead in its tracks. This may give you enough time to assess your situation and create a strategy for staying in your home.
The sooner you receive bankruptcy advice, the sooner you can decide if it’s a good idea. If it is, don’t hesitate to learn more about the process, your legal rights and how to take the first step.