If you’re facing financial difficulties and concerned about the future, you may decide to learn more about consumer bankruptcy. Both Chapter 7 and Chapter 13 can bring a variety of benefits to your life, all of which can help you get back on track.
Before you file for any type of bankruptcy, it’s critical to first address any unanswered questions. Here are some of the most common:
- Will you lose everything? This is a common misconception, but even in Chapter 7 bankruptcy you won’t lose all of your assets. There are exemptions that allow you to protect many, if not all, of your assets.
- What will happen to your credit? This depends largely on the type of bankruptcy you file. A Chapter 7 bankruptcy filing remains on your credit report for 10 years. A Chapter 13 bankruptcy filing remains on your credit report for seven years. Either way, it’s a long time. However, you don’t have to wait until it’s gone to begin to rebuild your credit. You can use tools, such as a secured credit card, to slowly regain your footing.
- Will creditors finally stop calling? The short answer is yes. Thanks to the automatic stay, once you file for bankruptcy your creditors are required by law to stop all collection activity. This will finally give you time to review your situation without creditors constantly reaching out.
- Is bankruptcy a good way to save your home from foreclosure? There are many ways to protect your home against foreclosure, with consumer bankruptcy one of the best. Once again, the automatic stay works in your favor, as it stops the foreclosure process. This gives you time to learn more about your situation and devise a plan for the future.
These are just a handful of the many consumer bankruptcy questions to answer as you ponder the use of this financial tool.
Bankruptcy isn’t the right choice for every consumer in financial distress, but it’s worth your consideration. You may soon come to find that it’s the best way to stabilize your finances, all with the idea of living a better life in the future.