What Do You Need to Know Before You File for Bankruptcy?

When you’re suffering from financial hardship and can no longer handle your debts, you might be considering filing for bankruptcy. This can offer you some relief from the stress you’re experiencing and allow you to get back on your feet. However, this isn’t a decision that you should make lightly—bankruptcy should be carefully considered, and you should understand all aspects of it before filing.

The bankruptcy process can be confusing, especially if this is your first time filing. Having a bankruptcy lawyer on your side can make the entire process much easier. They can help you determine what’s right for you and answer any questions you have throughout filing.

Let’s take a look at what you need to know before you file for bankruptcy so that you can be fully informed.

Important Information About Bankruptcy

Before you file for bankruptcy, there is information you need to know to ensure you’re fully informed about the risks and consequences involved. Going into the process without knowing can lead to you being taken advantage of, or you could regret your decision after you’ve already filed.

You might think that a bankruptcy will wipe your slate clean easily, but that’s not the case. There are plenty of aspects to carefully consider before you file for Chapter 7 or Chapter 13. Here are some of the things you need to know before you file for bankruptcy:

• Follows a longer timeline. You might initially think that this process is similar to small claims court, and that the timeline is quick and painless, but bankruptcy doesn’t follow that same time frame. Typically, bankruptcy cases can take anywhere from three to six months to be completed. When you have debt that you need cleared now, this can seem like a long time. That’s why it’s important to think about before making that decision.
• Can feel very invasive. When you file for bankruptcy, you will need to list all of your assets. This can feel like they’re invading your privacy, but they need to know every single asset and creditor that you’re in debt to so that they can fully understand the scope of your situation. Additionally, you will likely have a meeting with all of your creditors in the same room who can ask you questions. You need to be honest about your assets, no matter how uncomfortable you are, so that your claim is as thorough as possible.
• Public record. On top of that, all of your debts will become public record. This means that all of your assets, debts, and income will be available for the public to view. For some people, this is embarrassing and can make them choose not to file. But if you really need the debt discharge to relieve you, then you will have to endure the potential public scrutiny.
• Confusing process. Filing for bankruptcy can be a long and confusing process, especially when it’s your first time. You might not know if you should file for a Chapter 7 or a Chapter 13, which can be difficult to determine. Even with the help of a bankruptcy lawyer, it can all be too complicated and can deter you from deciding to file.
• Costs money. Another part to consider is that filing for bankruptcy can be pricey. Even when you’re struggling financially and need to clear your debts, it will cost money to do that. Even though you can get fee waivers depending on your poverty level, most of the time you have to pay those fees in order to file. Additionally, you will want to hire a bankruptcy lawyer to help you, but attorney fees can also leave your pockets empty. It’s important you find an attorney who works for you and whose fees will be manageable.
• Affects your credit. One of the most important things you have to consider from bankruptcy is how it affects your credit. You might think your debts are wiped clean, but there will be a permanent record of your bankruptcy for seven years if it is a Chapter 13 and for ten years if it is a Chapter 7, and your credit score will likely drop. This means that most creditors likely will not loan you money during that time because the bankruptcy is on your record.

Now that you know what to consider before filing, you should be able to make a more informed decision about whether or not bankruptcy is right for you. If you still have questions, you should reach out to your bankruptcy attorney so that they can give you the answers you need.

Our Baltimore Bankruptcy Lawyer Will Guide You

When you don’t know who to turn to after serious financial struggles, you can put your trust in a Baltimore bankruptcy attorney from Belsky & Horowitz, LLC. We’ll guide you through the filing process so that you can feel confident and fully understand what’s going on. Contact us today so that we can discuss your options.