There are usually a lot of questions in the minds of those who are filing for bankruptcy and those who are considering filing for bankruptcy for the first time. Knowing the answer to these questions can help you in considering whether or not you should really file for bankruptcy.
1. What is bankruptcy?
This question is one of the most common ones. Essentially, bankruptcy can help you eliminate or discharge certain debts in the instance you can no longer pay for them. It will undergo a legal process under the federal bankruptcy court.
2. What are the benefits of filing for bankruptcy?
When you file for bankruptcy, you will be able to stop the foreclosure of your home for instance. In other cases, you will no longer need to pay the debt you owe after you get a bankruptcy discharge.
3. What doesn’t bankruptcy cover?
Despite bankruptcy being able to cover up most debts, there are certain debts which it cannot dismiss, especially those which are secured. Some of these include mortgages and car loans. There are also other special debts which it cannot dismiss.
4. How often can you file for bankruptcy?
If you are filing for a Chapter 7 bankruptcy, the next time you can file is after eight years. If you are filing for a Chapter 13 bankruptcy, you can file again any time.
5. What is the Chapter 7 bankruptcy?
It is also known as the liquidation bankruptcy. In this type of bankruptcy, your debts will be paid off through the liquidation of your assets.
6. What is the Chapter 13 bankruptcy?
This will help you in establishing a payment plan with your creditor while taking your income into consideration. You will need to pay your debt on a regular basis.
7. Who can file for bankruptcy?
Generally, anyone can file for bankruptcy. It is ideally designed for individuals who feel as though they are overwhelmed by financial problems.
8. Will filing for bankruptcy ruin my credit?
Filing for bankruptcy will not totally ruin your credit. However, there might be difficulties in rebuilding your credit after you file for it.
9. Can bankruptcy discharge my student loans?
Not every type of debt is covered by a bankruptcy discharge. Student loans go under the special debts which it does not cover together with alimony, child support, criminal fines and certain taxes.
10. Will my employer know I filed for bankruptcy?
Bankruptcy files are open to the public. However, your employer will not know that you filed for bankruptcy unless they look into the bankruptcy records or if you have a debt from your employer.
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