5 Things You Need to Know About Bankruptcy Law
Bankruptcy law is an incredibly complex area of law, but it can be helpful to understand the basics. Here are five things you need to know about bankruptcy law:
1. There Are Several Types of Bankruptcy
Different forms of bankruptcy provide different levels of debt relief and protection from creditors. Businesses may file for Chapter 7 or Chapter 11 bankruptcy, while individuals can file for Chapter 7 or Chapter 13.
2. Bankruptcy Is a Legal Process
To begin the bankruptcy process, you must complete and submit paperwork to the court. This paperwork includes documentation of your debts and assets and a means test to determine if you can file for Chapter 7 or Chapter 13 bankruptcy.
3. Filing for Bankruptcy Involves Fees
Court costs and attorney fees are associated with filing for and completing the bankruptcy process. Be sure to speak to an attorney experienced in bankruptcy law about these costs before deciding whether bankruptcy is right for you.
4. Bankruptcy Can Affect Your Credit Score
Filing for bankruptcy will hurt your credit score and make it more challenging to secure loans or other forms of credit.
5. Bankruptcy Can Be Discharged
Once you’ve completed all your required payments, the court can legally discharge most of your debt. This means you will no longer owe money to those creditors, and they can no longer attempt to collect the debt from you. However, some types of debt can’t be discharged, such as student loans and child support.
It’s essential to understand your options before deciding whether filing for bankruptcy is the right decision for your situation. Consult a qualified attorney specializing in bankruptcy law to discuss your case and determine the best way to proceed.
