Bankruptcy – Questions and Answers
When dealing with credit card debt, consumers may often find themselves contemplating bankruptcy. Although we never recommend this method of debt relief, below consumers will find some general answers in regards to common questions.
Americans are struggling more now, than ever before. Consumers are feeling the pinch and trying desperately to finds solutions to their credit problems. Below are some questions that consumers have when coming to terms with bankruptcy. These questions may help with ones decision of whether or not bankruptcy is the right option for them.
What are the advantages to bankruptcy?
When filing bankruptcy, the intention is to wipe the slate clean so to say. Obviously, the largest benefit to bankruptcy is to remove the obligation to unsecured debts in an attempt to start over.
What are the disadvantages of bankruptcy?
Most consumers find the disadvantages of filing for bankruptcy to be the credit. When one files for bankruptcy their credit will take a hard hit. Bankruptcy will show negatively on one’s credit report for 7 to 10 years. This seems to be the number one reason that consumers do not want to file for bankruptcy. Some banks now ask if the consumer has ever filed bankruptcy, ever being that key word. If a consumer has a possibility of avoiding bankruptcy, then by all means avoid it. It's a status one files which will haunt that person for a great deal of time.
Will the creditors and collection agencies stop harassing me?
Yes, once bankruptcy is filed these creditors will stop the harassment. It will be the job of the assigned lawyer to issue letters to the creditors to which you owe - asking them to cease and desist communications with you.
Can I still get credit after filing for bankruptcy?
After filing for bankruptcy it will reflect ones credit horribly. It is possible to get credit after bankruptcy, but not as easy. It is a good idea to start to establish credit after bankruptcy. Getting a pre-paid credit card is a good start. The topic "ways to increase credit", listed below may help. It is imperative that one keeps up on their minimum payments. Creditors will be more willing to take a chance if the notice a good payment history.
Does my spouse have to file with me?
Not always, each state is different and has different laws to abide by. If the debt is in one spouses name chances are a separate filing can take place.
Do I have to get a lawyer when filing?
Not necessarily, but there is a lot of paperwork involved and legal maneuvers that one might not know about. Having a lawyer will help to ensure that there are not any lose ends after filing. Some states have attorneys that will assist for more reasonable amounts or have a hardship program.
Do I have to appear in court?
All consumers filing for bankruptcy will have to show up for a 341a meeting. These meeting are for both the consumer and the collectors. Creditors may or may not show up to the meeting. They have the right to have a review on the bankruptcy that is taking place. This would be another good reason to have an attorney.
Everyone has a right to start over as long as they have weighed the options. Filing for bankruptcy does not mean that one is a bad person. It is understandable that there are times when one needs to reach for help and have a fresh start. It is a good idea to look at this as a lesson learned. Start keeping track of expenses and understand what it is that can be done to secure your financial future.
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