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Providing the Needed Answers
Filing for bankruptcy can seem overwhelming. With all the paperwork, legal guidelines, and qualifying factors to consider, it's no wonder this is a common source of anxiety for anyone considering it an option. To help inform our readers about this often misunderstood topic, we've compiled a list of some commonly asked questions about bankruptcy and answered them.
Whether you're worried about how filing could affect your credit score or wondering which type of debt might be dismissed, this blog will provide insight into what to expect from such an important financial decision.
What Are The Different Types of Bankruptcy Available?
Several types of bankruptcy may be available for you. Chapter 7 bankruptcy, the most common type, allows individuals to wipe out most of their unsecured debt, such as medical debt and credit card debt. Chapter 13 bankruptcy, on the other hand, creates a repayment plan for individuals to pay off their debt over three to five years. Chapter 11 bankruptcy is primarily reserved for businesses, allowing them to restructure their debts and continue operations.
Each type of bankruptcy has distinct advantages and disadvantages, so you should consult with an experienced bankruptcy attorney to determine how to proceed
Are All Types of Debt Dismissed When Filing a Bankruptcy Petition?
You may file for bankruptcy for a fresh start when overwhelmed with debt. However, not all types of debt are wiped away once a bankruptcy petition is filed. For example, bankruptcy generally cannot eliminate student loans, taxes, and child support payments. However, credit card debt and medical bills may be discharged if the debtor qualifies.
Understanding which debts can and cannot be discharged before filing for bankruptcy is crucial. Seeking a bankruptcy attorney's advice can help ensure the process is as smooth as possible.
Is It Possible to Keep My Home if Filing For Bankruptcy?
Filing for bankruptcy is a daunting decision, especially regarding how it will affect your home. However, it is possible to keep your home in some bankruptcy cases. Depending on your situation, you can use certain bankruptcy exemptions to keep a portion of the equity in your home.
Additionally, if you stay current on your mortgage payments, you can reaffirm your mortgage and keep your home. Speaking with a bankruptcy attorney is essential to decide the best option for your situation. While bankruptcy may not be ideal, it can provide a fresh start and a path toward financial stability.
How Long Does Bankruptcy Stay On My Credit Report?
Depending on the type filed, bankruptcies are typically reported on your credit report for up to 10 years. This means that potential lenders or creditors will be able to see bankruptcy in your credit history. While this may seem intimidating, it's important to remember that bankruptcy doesn't necessarily mean the end of your financial journey. With responsible spending habits and timely payments going forward, you can gradually rebuild your credit score and financial standing.
How Can I Rebuild My Credit After Filing For Bankruptcy?
Filing for bankruptcy can have long-lasting effects on your credit score. However, it doesn't mean that it's the end of the road for your financial journey. You can take several steps to rebuild your credit after bankruptcy.
One crucial step is to ensure you pay all your bills on time. Timely payments can help you establish a positive credit history, which can gradually improve your credit score.
You can also get a secured credit card or a personal loan to help you rebuild your credit. These credit products usually have lower interest rates and can help you build back a positive credit history, which will reflect in your credit score.
With time and determination, it's possible to get your credit back on track and regain your financial footing.
Work With a Bankruptcy Attorney
In conclusion, the fear of filing for bankruptcy tends to cause confusion and anxiety, but understanding what to expect when filing can provide peace of mind. Don't hesitate to call the bankruptcy attorneys at Pacific Cascade Legal to learn more about navigating through bankruptcy and receive further direction. We're ready to help you achieve a better financial future.
Learn more about filing for bankruptcy or schedule a consultation by calling (888) 981-9511 or visiting our website.