Bankruptcy and Things to Know about it

Bankruptcy and Things to Know about it

Bankruptcy petition

People get tangled in debts for various reasons. Some manage to get out of it, while others have no other option but to file for bankruptcy. Filing for bankruptcy is often a scary choice, but knowing what to expect when you do so can make you feel less anxious.

It is important to find the right bankruptcy attorney in Salt Lake City (one such as Utah Bankruptcy Pros) who will handle your case. But what happens after that? Here are important things you need to know when you are ready to file one.

What to know about bankruptcy

There are different types of bankruptcy

Chapter 7 and Chapter 13 are two separate types of personal bankruptcy you can file for. The former is known as liquidation bankruptcy where your assets are liquidated and used to pay off your debts. The process lasts for three to six months. Chapter 13, on the other hand, is known as reorganization bankruptcy where your finances are reorganized to help you pay most of your debts. The whole process will last for at least three years or so.

It will affect your credit

Just because you have filed for bankruptcy and has, in one way or another, managed to clear yourself off of debts, does not mean that your credit rating will reset. Bankruptcy records will affect your credit rating and might reflect on it for years.

Not all debts can be discharged

Unpaid taxes and child support are just some of the financial obligations and debts that cannot be discharged when you file for bankruptcy. Thus, before filing, make a list of debts that can be discharged and those that cannot and make a proper evaluation based on it.

Filing for bankruptcy is not free

You need an attorney when you file for bankruptcy, and everyone knows that services from professionals do not come cheap. Therefore, when you decide to file for one, make sure you have a budget set aside to avail professional services.

Contrary to popular belief, filing for bankruptcy is not the end of it all. In fact, it is one way to allow yourself to have a fresh start. Weigh your options to make the right decision with your finances.