Filing for bankruptcy can be one of the best things you do for your finances. It can help you get out from under the weight of crushing debt, while also giving you the chance to get on firm financial footing. You can use bankruptcy to save your house from foreclosure, and you can use bankruptcy to protect your family’s future.
Though bankruptcy can have enormous benefits, it is not right for everyone. It’s important that you think through all the specifics before you make any choice. Here are some of the considerations you should make before filing for a Gilbert bankruptcy and that you should discuss thoroughly with your bankruptcy attorney:
Debts that Can be Discharged
There are two types of bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Under Chapter 7 bankruptcy, most or all of your unsecured debts can be discharged, including credit card bills, medical debts, and personal loans. There is no limit on how much debt can be discharged. Under Gilbert Chapter 13 bankruptcy, your debts are reorganized so that you pay them back with one monthly payment over a term of three to five years. Some of those debts can be discharged at the end of the repayment period, and you may end up paying less over that term than you would if you were paying your debts on your own.
What type of bankruptcy will be best for you depends on what type of debts you have. If you are primarily behind on your mortgage or have overdue student loans, Chapter 13 bankruptcy may be the better option. Whereas if you primarily have credit card debt, Chapter 7 is likely the better choice.
How Assets Will be Impacted
You can’t just declare that you can’t pay your debts and move on, keeping your savings and assets to yourself. The bankruptcy court will look at what assets you have and determine your ability to pay back any or all of your debts.
If you want to file for Chapter 7 bankruptcy, you will be allowed to keep a certain amount of assets. Typically, you can keep your own clothing and personal belongings, and you keep your home and vehicle if you have a limited amount of equity. However, if you have assets that exceed those limits, they can be seized and liquidated to pay your creditors.
You may not want to file for Gilbert Chapter 7 bankruptcy if you have a lot of assets or you have particular assets that you don’t want to lose.
Impact on Your Future Credit
Of course, one of the biggest concerns that many people have about filing for bankruptcy is how it will impact their credit. Many people think that filing for bankruptcy means they won’t be able to buy a home or a new car for many years into the future. So they continue to struggle with paying their debt instead of taking advantage of the debt relief option that bankruptcy provides.
The truth is that bankruptcy does negatively affect your credit, but so does continuing to struggle under massive debt. Every month that you have excessive debt balances, late payments, and delinquencies, your credit will continue taking a hit. Refusing to file for bankruptcy can actually bring your credit down longer. Plus, you can easily rebuild your credit after filing for bankruptcy so long as you live within your means, pay your bills on time, and be careful about taking out unnecessary credit.
While bankruptcy can certainly offer you many benefits, it is important that you talk through these and other issues with a bankruptcy lawyer before you make a final decision. You should be sure that you are making the right choice for your financial circumstances. By taking the right steps, you can get back on firm financial footing.
Gilbert Bankruptcy Lawyers are ready to help. A bankruptcy lawyer from our team can help you understand all the intricacies of bankruptcy, and how a filing can impact your financial situation. An attorney will also review your financial circumstances and make a recommendation to get the maximum debt relief. Call us in Gilbert today to talk with one of our bankruptcy attorneys about your options.
Gilbert Bankruptcy Lawyers