If you're in financial trouble, filing for bankruptcy might provide relief. Chapter 7 bankruptcy can discharge many types of debt, while Chapter 13 bankruptcy protects your assets and helps you develop a more manageable plan for repayment. However, in either case, bankruptcy has long-ranging effects you may not realize. To determine whether bankruptcy is what you need, Pearce Law Firm in Foley, Bay Minette, and Atmore in southern Alabama recommends asking yourself a few essential questions.

3 Bankruptcy Questions to Answer Before Filing

1. Do I Qualify?

If your earnings are too high, you won't qualify for Chapter 7 bankruptcy, which typically requires you to make less than the median income for your state. You still could qualify for Chapter 13 bankruptcy, but whether it will help you depends on your circumstances. Some debts, including taxes, child support, and student loans, cannot be discharged through bankruptcy.

2. Do I Need It?

If you reasonably can repay the debt by setting up a payment plan, getting credit counseling, cutting back spending, or liquidating belongings, an independent approach often is a better financial choice. Finding a way to pay your debts without a bankruptcy filing will leave your credit in better shape and help you make a faster financial recovery. You also should avoid bankruptcy if you're expecting a change in circumstances that will make your debt manageable.

3. Can I Handle the Effects on My Credit?

A note of bankruptcy on your credit report lasts ten years for a Chapter 7 filing and seven years for a Chapter 13 filing. It will be much harder to get a loan, make major purchases, and even rent an apartment during this time. A bad credit report also has significant monetary costs you should consider before filing.

If you answered these questions and still think bankruptcy might be the solution you need, trust Pearce Law Firm for help with your filing. Call (251) 368-2992 or contact them online to schedule a consultation. Visit their website for more information about their practice areas, including criminal and DUI defense.