4 Things to Know About Bankruptcy Filing
When a person is faced with a significant amount of debt, a bankruptcy filing can seem like an attractive alternative. In most cases, filing fees are quite low and the process can save a person thousands of dollars. However, before a debtor hires a bankruptcy lawyer, they should consider the facts listed below.
There’s a Potential for Property Loss
One of the biggest consequences of Chapter 7 is that the filer can lose non-exempt property or its cash equivalent. Many lack such property, and the law is liberal enough that most of a person’s possessions can be protected. If the filer has assets such as a vacation home, motor home, or pleasure boat, they should consider filing for Chapter 13 as it allows them to keep all their possessions.
Bankruptcy Has Serious Effects on a Filer’s Reputation and Credit
Bankruptcy stays on a person’s credit report for up to ten years, depending on the reporting credit bureau. It’s visible to anyone pulling the debtor’s credit report, and it’s possible to see credit scores diminish by 200 points or more. Not only that, the filer’s reputation can suffer, especially in a small town where the filer owes money to a local merchant.
Discrimination is Possible
Government agencies cannot discriminate against a filer because of a bankruptcy or a discharged debt. Simply put, agencies granting housing or other government assistance cannot deny help. A utility company can’t deny service, and private employers aren’t supposed to discriminate. However, some companies won’t hire those who have gone through bankruptcy.
Not All Debts are Eliminated
Despite popular belief, Chapter 7 bankruptcy does not eliminate all unsecured debts. A filer will still have to repay alimony, back taxes, child support, and student loans.
Carefully Consider the Consequences
There are some disadvantages to a bankruptcy filing, and clients should only do it as a last resort. Credit counseling is a viable alternative in many cases; it has helped thousands of people handle their debts. Some people may qualify for a debt settlement program where debts are consolidated and it’s not necessary to take out other loans. For situation-specific guidance, call the firm, or visit http://tulsabankruptcylawyers.net/bankruptcy-attorney-tulsa-chapter-7-bankruptcy/ for general info.