While many people are familiar with the term “bankruptcy,” most don’t understand how it works. Instead of taking a stab in the dark on your own, turn to a bankruptcy lawyer, who has the experience and knowledge to advocate for you through the process. Before moving forward with filing, here are some frequently asked questions to help get you started.

Frequently Asked Questions About Bankruptcy 

What is bankruptcy?

Bankruptcy is a federal court procedure that helps consumers or businesses catch up on large debts. When consumers file, their property is either liquidated (or sold) to repay their creditors, or finances are reorganized to establish a repayment plan of no more than five years. During the bankruptcy process, an “automatic stay” is issued, which shields you from additional lawsuits and other means of debt collection. Creditors can only begin contacting you again once the court has lifted this protective order.

Should anyone in debt file for bankruptcy?

While bankruptcy may be the best option for individuals with debts much higher than their combined income and assets, the procedure should only be used when necessary. Many bankruptcy lawyers offer free consultations, during which you can discuss your options and whether the process would benefit you. In the meantime, if you can continue to pay the minimum on your bills when they’re due, it’s recommended to do so.

Does bankruptcy wipe away your debt?

Filing for bankruptcy can rid you of some debt, but it may not release you from all responsibility. Any unsecured amounts from hospital bills and credit cards, for example, can be forgiven by the government. However, financial responsibility for federal taxes, child support, and alimony will not be discharged. A bankruptcy judge generally won’t discharge student loan debt either, unless your bankruptcy lawyer successfully argues that a repayment plan would cause insurmountable hardship.

Who will find out you filed for bankruptcy?

Technically, bankruptcy filings are public, just like any other court record. However, your friends, family, and employer likely will not come across this information unless you share it with them. Co-debtors and creditors, however, will be sent a direct notice of your bankruptcy, along with any ex-spouse that receives your child support. Credit bureaus will also be made aware and can share this information with any companies that run a credit check on you for seven to ten years after filing.

If you need a bankruptcy lawyer to advocate for you while filing for bankruptcy, contact Donald K. Swartz. Based in Batavia, OH, the Swartz Law Office has provided residents with custody, divorce, and mortgage help since 2011. Because he serves clients’ best interests, you can rest assured this probate attorney will always be there with honest and personal legal counsel. To schedule a free consultation, call (513) 732-0900 or complete this convenient online contact form.