Questions to Ask Before Filing for Bankruptcy

Perhaps one of the toughest ones you’ll ever have to make is whether or not to file for bankruptcy. While it’s a great way to discharge unsurmountable debt, there are many considerations you should keep in mind before filing a petition.

Should I File for Chapter 7 or Chapter 13 Bankruptcy?

In Chapter 7 bankruptcy, most of your unsecured debt like unpaid credit card bills will be discharged. Secured debt, such as mortgages or car loans, won’t be forgiven, though. To have these loans to be dismissed, you’ll have to return your house or vehicle to creditors.

                                                                                         

Chapter 13 bankruptcy, on the other hand, restructures your loan so that you can repay a portion of it over the course of three to five years. Unlike the latter, this may help you hold onto your properties.

Can I Even Afford It?

It might sound ironic, but a bankruptcy filing entails paying hundreds of dollars’ worth of processing fees. If you plan to go ahead with it, you must have the financial wherewithal to afford the process.

Can I Live with the Consequences?

A bankruptcy filing will stay on your credit report for as long as 10 years. Even if you get out of bankruptcy a few years from now, and maybe even reversed your financial fortunes, that black mark will stay with you for the next decade.

If you’re unsure about whether bankruptcy is a viable option for you, don’t hesitate to get in touch with a trusted bankruptcy lawyer. He or she will provide valuable counsel to help you decide what the best course of action is.