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Being overwhelmed with debt is a horrible feeling. When you’re struggling to pay the bills and getting nowhere in the process, it’s normal to want to find a way out. This is why many debtors turn to bankruptcy.
Bankruptcy can certainly help alleviate your debt. Chapter 7 bankruptcy results in the discharge of most consumer debts, and Chapter 11 and 13 provide a way to repay a reduced amount to creditors on more favorable terms. It seems like a dream come true for the debt-weary. But is it?
Actually, bankruptcy has a number of negative effects that debtors should seriously consider before filing. Here are some of them.
* In Chapter 7 bankruptcy, you may lose some of your money and property. Certain items that are paid for are exempt, but non-exempt items may be sold to partially repay creditors. And unless you reaffirm and continue to make payments on secured debts, the collateral securing them may be repossessed. This includes your home if you have a mortgage and are behind on your payments.
* Some kinds of debts cannot be discharged by bankruptcy. These include child support, alimony and student loans in most cases. Some tax debts may also be ineligible for discharge, and legal settlements are often excluded.
* Bankruptcy is a matter of public record. This means that anyone who is interested can find out that you have filed. Bankruptcy is simply not something that one can keep a secret.
* You’ll have a hard time getting credit in the future if you file. Those who file for bankruptcy may have a hard time qualifying for a credit card or loan for several years. And when they are able to get one, in most cases they will pay much higher interest rates than someone who does not have a bankruptcy on his record. Bankruptcy remains on your credit report for up to ten years.
* Bankruptcy can affect your ability to rent a dwelling, get a cell phone and more. Landlords and service providers often run credit checks, and when they see a bankruptcy on your record, they may turn you down. Those who are accepted can expect to pay a larger deposit than normal.
* You might find it difficult to get a new job. Employers often run credit checks on prospective employees, especially when the job involves handling money or valuables. Those who have filed for bankruptcy are usually passed over in favor of those with better credit records.
There are alternatives to bankruptcy. Credit counseling can help you repay your debts more quickly with lower interest, and debt negotiation can lower the amount you owe. Examining these options before filing for bankruptcy could save you a great deal of anguish.
Filing for bankruptcy is a hard decision to make. No one wants to admit that he is in debt over his head. But sometimes a fresh start is necessary, and that’s exactly what bankruptcy provides.
Once you’ve decided that you want to file bankruptcy, you’ll need to find a good attorney. It is possible to file bankruptcy on your own, but it is quite a complicated process. Having a knowledgeable lawyer on your side can help ensure that everything goes smoothly and you accomplish what you set out to accomplish: a discharge of all eligible debts.
Where to Look
If you’ve never filed for bankruptcy before, you may not know much about bankruptcy lawyers in your area. Friends and family may be able to help. If you ask enough people, you’re bound to run across someone who has either filed for bankruptcy himself or knows someone else who has. This can be a good way to get referrals, or at least find out who not to go to.
Non-bankruptcy lawyers are also a good source of information. Those in the legal profession are usually good about giving referrals, because they have their own specialties for which other lawyers send referrals their way. If you’ve worked with a lawyer on something unrelated to bankruptcy, ask him whom he would recommend.
If all else fails, get out the Yellow Pages or search online for bankruptcy lawyers in your area. You probably won’t find much besides contact information, but this can help you make a list of lawyers to check out on your own.
What to Look For
Now that you have a few options, call around and start asking questions. It’s a good idea to start out with a consultation, which is usually free. This will give you the opportunity to visit the lawyer’s office and see how things work there, as well as meeting the lawyer himself to determine whether he is what you’re looking for.
Here are some things to think about when considering a bankruptcy lawyer:
* Does he specialize in bankruptcies? Those who handle all types of cases rarely have the same level of expertise as those who have built their careers on bankruptcy cases.
* How much does he charge in fees? While this probably shouldn’t be the sole basis for your decision, you do need to find a lawyer you can afford. It’s also important to know whether everything is included in the quoted fees or if other charges could be added in certain situations.
* Does he take the time to learn about your situation and answer questions to your satisfaction? These things are very important, because each bankruptcy is unique. And things just tend to go more smoothly when you are comfortable with your lawyer.
* How many people will be involved with your case? It’s not unusual for a lawyer to have a paralegal or assistant take care of certain aspects of your case. If this is how your lawyer does things, make sure you’re comfortable with it and with the other people you’ll be dealing with.
When facing bankruptcy, a good lawyer is essential to make sure things go as they should. Taking the time to find the right one will help ensure that as many of your debts as possible are discharged.
Filing for bankruptcy is a hard decision to make. No one wants to admit that he is in debt over his head. But sometimes a fresh start is necessary, and that’s exactly what bankruptcy provides.
Once you’ve decided that you want to file bankruptcy, you’ll need to find a good attorney. It is possible to file bankruptcy on your own, but it is quite a complicated process. Having a knowledgeable lawyer on your side can help ensure that everything goes smoothly and you accomplish what you set out to accomplish: a discharge of all eligible debts.
Where to Look
If you’ve never filed for bankruptcy before, you may not know much about bankruptcy lawyers in your area. Friends and family may be able to help. If you ask enough people, you’re bound to run across someone who has either filed for bankruptcy himself or knows someone else who has. This can be a good way to get referrals, or at least find out who not to go to.
Non-bankruptcy lawyers are also a good source of information. Those in the legal profession are usually good about giving referrals, because they have their own specialties for which other lawyers send referrals their way. If you’ve worked with a lawyer on something unrelated to bankruptcy, ask him whom he would recommend.
If all else fails, get out the Yellow Pages or search online for bankruptcy lawyers in your area. You probably won’t find much besides contact information, but this can help you make a list of lawyers to check out on your own.
What to Look For
Now that you have a few options, call around and start asking questions. It’s a good idea to start out with a consultation, which is usually free. This will give you the opportunity to visit the lawyer’s office and see how things work there, as well as meeting the lawyer himself to determine whether he is what you’re looking for.
Here are some things to think about when considering a bankruptcy lawyer:
* Does he specialize in bankruptcies? Those who handle all types of cases rarely have the same level of expertise as those who have built their careers on bankruptcy cases.
* How much does he charge in fees? While this probably shouldn’t be the sole basis for your decision, you do need to find a lawyer you can afford. It’s also important to know whether everything is included in the quoted fees or if other charges could be added in certain situations.
* Does he take the time to learn about your situation and answer questions to your satisfaction? These things are very important, because each bankruptcy is unique. And things just tend to go more smoothly when you are comfortable with your lawyer.
* How many people will be involved with your case? It’s not unusual for a lawyer to have a paralegal or assistant take care of certain aspects of your case. If this is how your lawyer does things, make sure you’re comfortable with it and with the other people you’ll be dealing with.
When facing bankruptcy, a good lawyer is essential to make sure things go as they should. Taking the time to find the right one will help ensure that as many of your debts as possible are discharged.
