|By: StockMonkeys.com via Flickr
Is bankruptcy the right solution to your financial woes?
Bankruptcy Is Not a Cure-All
This is one of the biggest things anyone who is considering bankruptcy needs to understand. While it does provide a major degree financial relief, bankruptcy does not eliminate all debts. Bankruptcy does not wipe out…
- The vast majority of student loans
- Recent delinquent taxes
- Child support
- Fines and penalties, such as speeding tickets
That being said, bankruptcy does discharge many types of debt, including unsecured credit card debt and unsecured medical bills in most cases. It is important to note, though, that sometimes creditors can convince the judge that certain debts should not be eliminated due to the method by which the debt was obtained. For example, if you received a credit card by providing fraudulent information on the application, the debt might not be eliminated when you go through bankruptcy.
You Have to Keep Up With Payments
If you file for Chapter 7, you still need to keep up with payments on secured possessions, like your house or car, during the bankruptcy proceedings. Because bankruptcy immediately stops debtors from contacting you, you might not receive a bill for several months. Just because it isn’t showing up in your mailbox, though, doesn’t mean you don’t need to keep paying it.
It Can Stay on Your Credit Report for Up to a Decade
Filing for Chapter 7 bankruptcy allows you to discharge a lot of your debt to get a fresh start quickly. It is important to note, though, that just because your debts are gone doesn’t mean you get a totally clean slate. Bankruptcy stays on your credit report for 7 to 10 years, so if you file, be prepared to have a hard time obtaining credit for up to a decade.
It’s good to know, though, that having a bankruptcy on your report does not make it impossible to obtain financing. You can still get a secured credit card, which is a good way to help rebuild your credit. Home loans are very difficult to come by immediately following bankruptcy. Car loans are difficult to obtain through traditional lenders, but there are many businesses and organizations that offer financing despite a rocky credit history.
Not all bankruptcy attorneys are particularly forthcoming when it comes to fully explaining the bankruptcy proceedings or the options available to debtors. When you contact me, my staff and I will be happy to help you throughout the entire process, from determining your best course of action to receiving your discharge. Give The Law Offices of Eric L. Nesbitt, P.C. a call to schedule your consultation today.
Eric L. Nesbitt, Esq.
Law Offices of Eric L. Nesbitt, PC
Nesbitt Law Offices Website