3 Things to Understand About Bankruptcy
No one wants to file for bankruptcy; however, in dire circumstances, there are benefits. First, it offers protection from creditors. Bankruptcy can also relieve debtors from most, if not all, their debts. If you’re thinking about filing bankruptcy, here are some important things to understand.
1. Hire a Bankruptcy Attorney
Don’t make the mistake of thinking you can handle bankruptcy on your own. Some individuals think that they don’t have money to hire an attorney. There are law offices in Rockville Maryland with experienced attorneys that can help you navigate the complex process of bankruptcy. Not only will an attorney help you understand and complete the complicated forms, they will more than likely help you succeed. The American Bankruptcy Institute states that those individuals who hire an attorney are successful at being discharged of their debts in 96.2% of all cases. In contrast, only 66.7% of individuals have their debts discharged when working without an attorney.
2. Bankruptcy is a Long Process
The most common types of bankruptcy are Chapters 7, 11 and 13. It’s helpful to know that each type of bankruptcy will last longer than what most individuals expect. Filing for bankruptcy is not something that you can take care of in a day or two. For example, Chapter 7 bankruptcy is the most common type of bankruptcy for individuals and typically lasts up to six months. Chapters 11 and 13 bankruptcy can last for years.
3. Bankruptcy Discharge Only Protects You
If you’ve co-signed on any loans, you need to understand that bankruptcy is personal. This means that any loans that you’ve co-signed on will not be eliminated. The creditor cannot come after you for the loan; however, they can continue to seek payment from the other person who co-signed on the loan.
If you’re considering bankruptcy, do some research and hire a bankruptcy attorney. Understand that if you’re successfully discharged from your debts, your credit will be affected for years and you will need to work at improving your credit.