If your financial situation is dire because of excessive debt, you may be considering bankruptcy. Although filing can be an effective way to regain your fiscal footing, it is essential to know all the potential repercussions of doing so. You should also have a thorough understanding of the proceedings so you know what to expect at every stage. Below are answers to some of the most frequently asked questions on the subject.

Bankruptcy FAQs

Will Filing Discharge All My Debt?

Unfortunately, there are certain kinds of debt even bankruptcy cannot wipe out. These typically include child support obligations, tax debt, alimony payments, and student loans. If you have accumulated a significant amount in medical bills or credit card debt, though, bankruptcy could provide the debt relief you need.

What Is Chapter 7?

Commonly called liquidation bankruptcy, chapter 7 is for individuals with little to no income and more debt than they can reasonably pay off. After filing, the court liquidates any nonexempt assets to pay back some of your debt before discharging the rest.

What Is Chapter 13?

Also known as reorganization bankruptcy, this option is for people who do not qualify for chapter 7 but still need debt relief. When you file for chapter 13, you get to keep all your property, but you must propose a reasonable payment plan for paying off your debt.

Will Filing Destroy My Credit?

Although it is true that your credit score will take a hit when you declare bankruptcy, this dip is temporary. You can start rebuilding your credit as soon as the case is resolved. Most people who file can secure new lines of credit within a few years by making smart financial decisions.

If you are considering filing for bankruptcy, turn to Arndt Buswell & Thorn S.C. for quality legal guidance during every stage of the proceedings. You can learn more about the legal areas they practice, including real estate law and employment law, by browsing their website. To schedule an initial consultation and determine which type of bankruptcy you are eligible to file, call (608) 269-1200 for Sparta or (608) 486-2324 for Bangor, WI.