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If you are considering bankruptcy, you should learn as much as you can before beginning the process in order to make an informed decision. A key reason many seek out bankruptcy, is to discharge any outstanding debts they may carry.
When you file a chapter 7 petition, the goal is to discharge most of the debts you have listed. A discharge, therefore, is a court order saying you do not have to repay your debts. As you can guess, however, there are exceptions.
Certain debts like back child support and student loans may not be dischargeable. If you fail to list debts, attempt to cover up assets when filing for bankruptcy, you may not receive a discharge. Creditors cannot ask you to pay any debts which have been discharged and you may only receive a chapter 7 discharge once every six years.
Filing and receiving a discharge through Chapter 7 is not free from consequences though. Bankruptcy can appear on your credit report for up to 10 years. Filing for bankruptcy may affect your ability to receive credit in the future. You will not receive discharge of any debts you forgot or otherwise didn’t list on the bankruptcy schedules when you file.
If you are considering bankruptcy, your credit report and scores are probably already damaged so it may not cause too much change in that area initially. Eventually it may raise your credit score if you are consistently paying your bills according to the payment plans.
Bankruptcy can prevent or delay foreclosure on a home and repossession of a car as well as stop wage garnishment and other legal actions of creditors attempting to collect debt.
Remember, bankruptcy is not the end, it’s a new beginning. Call today for help and guidance as you consider your options.