For many people struggling with excessive amounts of debt, getting out from under the thumb of creditors can seem like an impossible task. Bankruptcy can help you start over, but if you’re just starting to consider it as an option, you likely have several questions. Here are some answers to some of the most frequently asked questions so you can better understand the filing process and your options.

4 Common Questions About Bankruptcy

1. How does bankruptcy work?

Bankruptcy is the process of discharging certain debts with the help of the federal court. The filing process allows the court to essentially bar creditors from suing you for lack of repayment and settles many debts so you don’t have to worry about paying them in the future.

2. Does filing absolve me of all debts?

No. Typically, the only debts that are forgiven are medical bills, credit card debt, personal loans, and other such financing options. Student loan debt, overdue and continuing child support payments, and back taxes are not typically forgiven and must be paid according to the schedule you agree to.

3. What is the difference between Chapter 13 and Chapter 7 bankruptcy?

These designations refer to the type of debt forgiveness you request from the court. Chapter 13 filings allow you to keep the majority of your personal property, but you have to agree to repay the court-appointed portion of your debt to the appropriate creditors. Chapter 7 filing allows you settle your debts by using personal property as a settlement. The creditors can sell your property and use the proceeds to satisfy outstanding debts and payments.

4. Will my credit score be impacted?

Yes. Whether you file Chapter 7 or Chapter 13 bankruptcy, you can expect your credit score to be impacted. For individuals with high credit scores, the number will drop fairly significantly. For those with low scores, the impact will be less noticeable. Regardless, filing only remains on your credit report for 10 years. During that time, you’ll still be able to work on improving your credit score without those debts hanging over your head.

Considering filing for bankruptcy? Schedule a consultation with an attorney at Cecil & Cecil PA in High Point, NC. Their experienced legal team understands the ins and outs of the filing process and will help you get through the complicated court proceedings as smoothly as possible. With more than 36 years of combined experience, you’ll know you’re in good hands. Learn more about their services online and call (336) 883-8383 to schedule a free consultation.