A Few Things You Should Know About Bankruptcy

There is no easy way to decide if bankruptcy is the right thing for you and you family. There comes a time when you feel like it could be the right course of action, but you want to make sure that you are looking at your options from every angle. One of the best actions you can take is talking to a bankruptcy attorney. These attorneys will be able to break down the process for you, and give you advice. Before you even talk to a lawyer, there are a few things that you should know about bankruptcy:

Credit

While you are going through a very tough time often your credit and credit score are the farthest thing from your mind. Remember that a bankruptcy is like an atomic bomb on your credit record. While it is true that a lot of your credit will be erased, the bankruptcy is still on your credit and will be on your record for ten years. While your credit score may actually increase, you will have a bankruptcy on your credit, and many lenders will simply not go near you. Ten years is a very long time to have this on your credit history, so consider all of your options very carefully.

There are also two different types of bankruptcy that you should be aware of. Here is an explanation of what each type of bankruptcy will entail:

Chapter 13 

Chapter 13 bankruptcy is also called a wage earner's plan. It allows a person with regular income to create a payment plan to repay all or part of their debts. The most important part of this plan is it will allow you to stop a foreclosure on your home. However, during a chapter 13 bankruptcy, you will be required to pay all of your mortgage payments on time. If you are employed and your debts are less than $394,725 and secured debts are less than $1,184,200 then you may qualify for a Chapter 13 bankruptcy.

Chapter 7

With a chapter 7 bankruptcy, you will not be required to pay off your debts, but your assets will be liquidated and be used to pay back your debtors. When filing for a Chapter 7 bankruptcy, it is going to be very important that you have a bankruptcy lawyer to walk you through the steps. The lawyer will also know if and how you can qualify for this type of bankruptcy. 

Contact a law office like Hamby & Hamby, P.A. for more information and assistance.