Late fees, medical bills and loans can lead to unmanageable debt. Bankruptcy can be a great tool for people who struggle to pay off their debts.
If you’re considering filing for bankruptcy, there are a few questions you may need to ask:
Is Chapter 7 bankruptcy my only option?
Chapter 7 bankruptcy is possibly the most common form of debt relief people use. However, it’s not your only option. If you have disposable income, then it may help to file for Chapter 13 bankruptcy. Chapter 13 can help reorganize debt so that they are more easily payable.
What is liquidation bankruptcy?
Liquidation bankruptcy is another name for Chapter 7 bankruptcy. That’s because Chapter 7 bankruptcy may require people to liquidate non-exempt assets to pay off their debts. However, many people don’t have to worry about liquidating assets.
What will happen to my credit score after bankruptcy?
Once you file for bankruptcy, your credit score will drop. This can ensure that people don’t take out more loans or debts irresponsibly. But, that also means that people have to build up their credit score again, which can start to happen after only a few months.
How often can I file for bankruptcy?
People can file for bankruptcy multiple times in their life. There is, however, a waiting period before people can file for bankruptcy again. For instance, it takes eight years before someone can file Chapter 7 after a Chapter 7 filing. And, it would take two years to file for Chapter 13 again after a Chapter 13 filing.
What should you do before you file for bankruptcy?
It’s important to gather the correct paperwork before filing for bankruptcy, such as financial reports and bank statements. You can also reach out for legal help when learning how to file.