If you find yourself receiving constant reminders for unpaid bills and dodging calls from creditors, you may consider filing for bankruptcy. This legal process allows you to regain your financial footing in the face of insurmountable debt. It is important that you consult with an experienced attorney who can walk you through your present situation to decide which bankruptcy option is right for you.  

What You Should Know About Bankruptcy Before Filing

1. Different Kinds of Bankruptcy Exist

The most common types of personal bankruptcy are Chapter 7 and 13. With Chapter 7, debts are discharged within months, but a portion of your assets may be seized and liquidated to pay off creditors. With Chapter 13, you pay off a portion of your debts over three to five years, depending on your income, after which the remainder is discharged. 

2. Your Credit Will Be Affected

Bankruptcy is not a get-out-of-jail-free card as it relates to your debts. Beware that a bankruptcy filing will appear on your credit report for up to ten years. That said, it is often not difficult to rebuild your credit after bankruptcy. You can obtain a secured credit card, for example, and use it regularly, always paying off at least the minimum. 

3. Not All Debts Can Be Discharged

Certain types of debt cannot be discharged in bankruptcy proceedings, for example, Student Loans. Neither child support nor certain back taxes will be forgiven, so in these cases, filing for bankruptcy will not help.  

4. Adding New Debts Can Backfire

Some people mistakenly assume that since they plan to file for bankruptcy anyway, they might as well buy some big-ticket items on credit now. However, bankruptcy courts will look at major purchases on credit cards with suspicion, if those charges were incurred in close proximity to your bankruptcy filing. You could even face allegations of fraud.  

5. Bankruptcy Is Not Your Only Option

While bankruptcy is one way to get out of financial trouble, it’s not the only way. Credit counseling, loan refinancing, and debt consolidation are all options.  However, not all debt consolidation companies are legitimate.  An attorney with experience in bankruptcy proceedings can guide you toward the right path.  It is possible that bankruptcy may be the only way to get a clean, fresh start.  

For knowledgeable advice on getting out of debt, trust Zellar & Zellar, Attorneys at Law, in Columbus, OH. This law firm has been helping clients find the path to a brighter financial future since 1965. They will take the time to examine your precise needs, advising you honestly and competently. Learn more about their bankruptcy work online. To meet with an attorney, call (614) 257-1643. 

This article is intended to provide general information and should not be construed as legal advice or in creating an attorney-client relationship.