There is no doubt about it – filing for bankruptcy is a big ordeal. As a result, people that consider filing should ask themselves some vital questions before pursuing bankruptcy. If you are on the verge of using bankruptcy for debt relief, here are some essential questions you should ask yourself before you file.
Can You Use a Different Method to Get Out of Debt?
As you ponder this decision, it might help to consider alternative ways out of debt. For example, if you have some cash that you can access, could you use it to settle your debts? Settling debts is one option people use for this purpose, but there are others. Talking to a bankruptcy lawyer can help you learn the alternative options and make the right decision.
What Will Bankruptcy Cause You to Lose?
The second question to ask is what you stand to lose if you file for bankruptcy. Some people must surrender assets they have when filing, and there are times when people even lose their homes. It is difficult to know what you will lose without talking to an attorney. Therefore, the best thing you can do is meet with an attorney to learn more about the risks of filing for bankruptcy.
Which Branch Would You Have to Use?
Meeting with a lawyer is especially important to find out which branch you must use if you file. People cannot always use Chapter 7, which is the more preferred option by many. Instead, some may only be eligible for Chapter 13. Chapter 13 is not a bad idea, but it takes longer and requires that you repay your debts. As a result, many people prefer Chapter 7.
Do You Understand the Long-Term Effects?
The final thing to ask about is the long-term effects of bankruptcy. Bankruptcy is an event that takes time. If you use Chapter 7, it will take around six months. If you use Chapter 13, it may take five years or longer. The time it takes is one of several effects that you should consider when deciding. The second one is the effects on your credit report. The court posts an entry on a person's credit file when they file, and it will not leave the report for 7 to 10 years.
Asking the right questions during a bankruptcy law visit is an excellent way to learn more about your options. To set up an appointment, call an attorney today.