Using a bankruptcy attorney, you can get back on your feet after hard financial times. However, many struggling borrowers find the bankruptcy process confusing and complex. If you’re financially in over your head, below are answers to some common questions you might have about bankruptcy.

Answers to Common Questions About Bankruptcy

What types of bankruptcy programs are available?

Chapter 7 and chapter 13 bankruptcy are both designed to help borrowers, but each provides benefits for people in different situations. Chapter 7 allows you to discharge unsecured debt, while chapter 13 gives you the opportunity to make up missed mortgage or auto loan payments. The best option for you depends on the types of debt you carry, your financial situation, and your own long-term goals.

What are the benefits of bankruptcy?

Both chapter 7 and chapter 13 bankruptcy can wipe out most unsecured debts, giving you a chance to start over. If you have secured property you’d like to keep, filing for chapter 13 allows you to make up arrears, possibly preventing foreclosure and repossession. Both programs also trigger an automatic stay, which puts an immediate stop to all collections activity, including lawsuits and wage garnishments.

Will bankruptcy affect my credit?

As soon as your bankruptcy is discharged, your credit score may drop by over 100 points. However, it also gives you a chance to start restoring your credit reputation, so many borrowers are eligible to buy a car or rent a new apartment within a year of filing.

Will I have to surrender all my belongings?

A chapter 7 bankruptcy allows the trustee to seize some of your personal assets to pay back your creditors. However, each state allows you to exempt certain types of property, including some home equity, clothing, furnishings, and even jewelry. With the help of a skilled bankruptcy attorney, many borrowers can file for bankruptcy without giving up any of their possessions at all.
 

If you’re struggling to meet your financial obligations, Mark O. Grater Attorney at Law offers the chance to get you a fresh start in life. For nearly 15 years, this law firm has been dedicated to providing debt relief to borrowers throughout southeastern Connecticut, delivering personal attention and customized advice to every client. Visit their website for more on their debt relief services, get updates and news on Twitter, or call (860) 449-8059 to arrange a free initial consultation.