Have you decided to go down the path of using bankruptcy to get yourself out of debt? You likely have some questions about the process that you need answers to.
Will You Be Able To Keep Your Home And Vehicle?
One of your biggest concerns with using bankruptcy will be if you are able to keep your home. If you are a homeowner, then you'll want to use Chapter 7 bankruptcy. The main thing to keep in mind is that you must stay up to date on all of your mortgage payments so that the home doesn't go into foreclosure. The same logic is also going to apply to any vehicles that you have, where you need to maintain car payments and not fall behind.
Can You Selectively Pay Off Debts?
You likely have some creditors out there that you owe money to and don't want to see them go without getting paid when you file for bankruptcy. Unfortunately, this preferential payment is not allowed once you decide to move forward with bankruptcy. Once it is discovered that you made a preferential payment, the money will be reclaimed from the creditor. The legal system prioritizes debts for you and pays back what you can with liquidated assets. It is not up to you to decide who gets paid and who does not.
Will Your Credit Be Ruined Forever?
While the effects of bankruptcy last a long time, it won't impact your credit forever. Depending on the type of bankruptcy that you use, it will take between 7 and 10 years for the bankruptcy to disappear automatically from your credit report. Until then, any lender that checks your credit will be able to see that you have filed for bankruptcy and can take that into consideration when deciding to give you a loan. You will also have to go through the process of building up your credit again after the bankruptcy is finalized. It is on you to budget accordingly, apply for a secured credit card, and continue to pay your bills on time. If you are using bankruptcy that uses a repayment plan, you must continue to meet your monthly obligation towards this plan and continue paying all other bills as well.
Do you have more questions about the complicated laws surrounding bankruptcy? It is best to meet with a bankruptcy lawyer in your area for assistance. They will help you throughout the entire process, answer questions, and ensure the bankruptcy is done correctly.
Reach out to a bankruptcy lawyer today for more information.