There are many questions people have about filing bankruptcy. Here are five common ones that are consistently asked during the initial consultation. Remember, meeting with us is the best way to assess your situation.
1. Will anyone find out that I filed?
The easiest way for someone to know you filed bankruptcy is for you to tell them. It is a public record, but unless you are a well-known celebrity or major corporation, most people don’t care enough to find out. Also, it does not carry the same stigma as before, especially since the “Great Recession.” You may be surprised by how many people you already know that have filed for bankruptcy.
2. Can I eliminate all of my debts?
In many cases, you can eliminate all of your debts. However, certain types of debts, like student loans, child support and alimony, debts incurred as the result of fraud, and some taxes, usually cannot be discharged.
3. Will I lose everything I have?
The process is designed to give you a fresh start, not to leave you destitute! To that end, you are allowed “exemptions” to protect certain assets. The exemptions and their amounts vary from state to state, but you will not lose everything. On the contrary, you may be surprised by how much you can keep.
4. How long before I can buy a house, or a car, or get a credit card?
Getting a car loan is easy if you have a paycheck and a pulse, and you are willing to pay the high interest rates. Credit cards will become available soon after you file, with higher fees and rates as well. For financing a house, it can take longer, but after three years you should qualify for conventional financing. The most important thing is actively rebuilding your credit without becoming a “repeat offender.” Missing payments after a bankruptcy discharge indicates financial responsibility issues. Therefore, it is imperative to pay your bills on time and work hard to build and maintain good credit.
5. Am I a “loser” for filing bankruptcy?
I have yet to meet a client who is a “loser.” More often than not, people come to us after a serious life-changing event, such as a medical emergency, divorce, or job loss. They are hard working people who should have come to us long ago, before they cashed out their retirements, pawned valuables, and paid huge fees for payday loans. They want to pay their bills and be responsible for their debts. I suggest clients project their situation out one year, three years, and five years. What is going to change? Are you going to increase your income? Is a promotion or higher paying employment in the works? Are some obligations ending to ease your burden? Assessing whether you are in a short term lull or a long term abyss can help you decide what action to take.
Find out more information from one of our Manchester bankruptcy attorneys.