Digging yourself out from under a mountain of debt can seem impossible, especially when your outstanding balances don’t seem to be going down. While a Chapter 7 bankruptcy can provide a way out, the process is complex, and even minor misunderstandings can have a dramatic impact on your finances. Below are answers to some questions borrowers often have about filing for bankruptcy.

Your Frequently Asked Questions About Chapter 7 Bankruptcy Answered

What types of debts can be discharged?

Chapter 7 bankruptcy allows you to eliminate a variety of unsecured debts, including credit cards, medical bills, and even some back taxes. However, some things, like unpaid child support, student loans, and business taxes, can’t be discharged in bankruptcy.

Will I have to give up my property?

In exchange for discharging your debts, the trustee of the court may seize some of your property to pay back your creditors. However, state and federal law allows you to exempt much of your property, so you may be able to file for bankruptcy without giving up anything at all.

Won’t bankruptcy hurt my credit?

After filing for Chapter 7 bankruptcy, your credit score will probably drop significantly. However, a history of late payments and accounts in default will also hurt your credit score, potentially causing even worse long-term damage. Most borrowers can actually start rebuilding their credit immediately, and may be able to buy a car within a year.

Do I need an attorney?

Due to the complexity of the law, anyone considering filing for bankruptcy should hire a legal professional. Your attorney will ensure that all eligible debts are included in your petition, help you keep as much of your property as possible, and fill out the paperwork on your behalf.

If you’re planning on filing for bankruptcy, you need a law firm who understands how important getting a fresh start can be. The Arnold Law Offices is committed to helping borrowers throughout Alabama’s St. Clair County wipe the financial slate clean. Visit their website to learn more about Chapter 7 bankruptcy, follow their Facebook for news and updates, or call (205) 338- 6565 to schedule a consultation with a member of their team.