If you’re experiencing financial hardship, you might wonder if filing for bankruptcy is the best solution to get back on track. While this legal action does offer many benefits, before moving forward, there are some facts you should consider. To better understand if filing is right for you, consult the guide below.
Facts to Consider Before Filing for Bankruptcy
1. What You’re Currently Capable Of
Although bankruptcy is a viable option for those who have no other means to rectify their situation, it should be looked at as a last resort. Before turning to such drastic solutions, consider the other ways you might be able to turn your finances around. For example, talk to any of your lenders to see if they can work out a payment plan with lower monthly payments, or try to take up some extra work to generate additional income.
2. Which Type of Bankruptcy Is Right for You
If filing for bankruptcy is your only option, you’ll need to determine which type is right for your situation—Chapter 13 or 7. Chapter 13 involves slowly paying back all of your debts through a court-appointed repayment plan. With Chapter 7, most of your debts are dissolved; however, certain loans and financial obligations cannot be discharged, such as spousal support, student loans, and government fines.
3. How Filing Affects Your Future
If you file for Chapter 7, you might be vulnerable to losing all of your nonexempt belongings, which include everything from cash to your home. Your credit score will also be affected. Both types of bankruptcy will bring your score down and stay on the report for many years; Chapter 13 will stay on for seven years, and Chapter 7 will stay on for 10.
If you’re considering filing for bankruptcy, turn to the legal professionals at The Gil Law Firm in Dothan, AL. With almost 20 years of service, they have helped thousands of clients regain financial health through counseling, representation, and guidance. Visit their website to learn more about how they will help you, and call (334) 673-0100 to schedule an initial consultation today.