Filing for bankruptcy is sometimes the only feasible way out of unmanageable debt. Before you file, it's important to understand the bankruptcy process and the implications of filing. Below are three things to know about filing for bankruptcy that can give you a better idea of what to expect.

Three Things To Know About Filing For Bankruptcy

1. Your Credit Will Be Impacted

Your bankruptcy filing—whether Chapter 7 or Chapter 13 bankruptcy—will appear on your credit report for up to 10 years. This means your credit score will take a hit, and anyone checking your credit (lenders, landlords, creditors, etc.) will see that you've filed. The good news is that you can immediately take steps to start rebuilding your credit; obtaining a secure credit card or qualifying for a car loan are two excellent ways to begin the process of rebuilding.

2. Filing For Bankruptcy Is An Opportunity

The obvious opportunity is that bankruptcy eliminates most types of unsecured debt (Chapter 7) or restructures it into a more manageable repayment plan (Chapter 13). But there is a larger, more beneficial opportunity as well: the chance to relearn how to more effectively manage your money. Credit counseling is a requirement for Chapter 7 bankruptcy filings, and you will learn how to better budget and stay on top of your finances.

3. Not All Debts Can Be Eliminated

Unfortunately, not all types of debt can be eliminated with a bankruptcy filing. Student loans are the most prevalent example; no matter how much you owe on your loans, the terms laid out by the government prevent any of it from being dischargeable in bankruptcy. Other examples of non-dischargeable debt include back taxes and child support payments.

Harry B. Zornow is a bankruptcy attorney who has been serving the Hamilton, Ohio, area for more than 30 years. Call (513) 737-9770 or visit his website to schedule a consultation; also, follow him on Facebook and Google+ to stay updated on related news and information. See if bankruptcy is the right solution for your financial challenges, and talk to an experienced bankruptcy attorney today.