It will impact your credit, assets, and way of life, but not as drastically as you might anticipate. Unfortunately, many misconceptions exist regarding bankruptcy.
Many people fear that everyone will know if they file for bankruptcy. This is only true if you are a well-known figure in the business world; otherwise, only your creditors will be interested in your specific filing. Even though bankruptcy proceedings are public, there are so many people filing each day that newspapers cannot conceivably publish all of the filings.
Simply because you have registered for Chapter 7 bankruptcy does not mean that all of your debts will be discharged; some simply cannot be. These include student loans, child support, alimony, and fraudulent debts. If you have been found liable for fraud and found culpable, this will also remain on your record.
Many of us believe that filing for bankruptcy will result in the loss of all assets and funds. This is not the situation. Although you have debts to repay, you will not be left without means of subsistence or divested of all of your assets.
Each state has its own bankruptcy laws, and the majority of them include exemptions that protect specific categories of assets, such as your car, home, retirement savings, clothing, and household goods.
If you continue to make regular payments after filing for bankruptcy, you will be able to retain the majority of your assets, including any loans or mortgages.
Do not believe those who claim that additional credit is unattainable. The contrary is true. You will find that loaning services are willing to lend you money because they can charge higher interest rates. However, before obtaining additional credit, you should ensure that you can afford to repay a loan without incurring additional debt. It may be necessary if you desire to purchase a home or vehicle, and it may be advisable to apply for a loan before declaring bankruptcy in order to obtain a lower interest rate.
Another consideration is your credit card. If you intend to file for bankruptcy, it may be prudent to pay off your credit card balances in full; doing so will prevent you from losing your credit card after bankruptcy.
Although it is not required, it is advisable for married couples to file for bankruptcy together; otherwise, the spouse who did not file is responsible for repaying all the debts his or her spouse claimed.
Although you are not required to consult with a bankruptcy counsel, it is recommended that you do so because bankruptcy procedures are tedious and you may incur penalties if you fail to adhere to them correctly. Therefore, it is advisable to obtain professional assistance if you wish to overcome this phase in the most effective manner.""
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