Most everyone has heard of and knows what bankruptcy is but those who have never filed it before may not really understand the process. In fact, there are a lot of misconceptions out there about bankruptcy. If you've found yourself struggling to meet your financial obligations, have been dodging creditor calls, and are overwhelmed with your debts, you might be thinking about filing for bankruptcy. Before you make your decision, there are some things you should understand about the process and how it can help you. Here's a look at some of the key things you need to know about bankruptcy.
Bankruptcy Takes Time
Many people consider bankruptcy thinking that it's going to be a quick fix to their financial struggles. While filing for bankruptcy will immediately cease your creditor calls, it isn't a quick process. There's a reason why bankruptcy filings take time. First, there's the time involved in gathering all of the information about all of your debts. You have to list all of your debts in the bankruptcy. You can't pick and choose creditors to list because that shows preferential treatment to other creditors. You may be able to exclude certain assets depending on the laws in your state, though, so talk with your bankruptcy lawyer about the specifics of that.
Additionally, you'll have to meet with a bankruptcy trustee who will help you to manage the repayment and discharge of your debts. Be prepared to devote some time to these meetings as this part of the process is an important one. Be honest about what you can and cannot afford and remember that your trustee and your bankruptcy lawyer are there to help you through the process.
Bankruptcy Can Discharge Medical Bills
There are certain types of debts that you cannot discharge in bankruptcy. Most federal tax debts, most student loans, and child support are among the things that cannot be discharged in bankruptcy. However, many people mistakenly believe that you can't discharge medical debts as part of bankruptcy either.
If you've been hesitant to file for bankruptcy because the bulk of your debt issues are medical, don't be discouraged. The truth is that you can include your medical bills in your bankruptcy filing. You'll just need to have documentation of each of those debts and the current balances.
Bankruptcy Doesn't Destroy Your Credit Indefinitely
Another reason why people hesitate to file for bankruptcy, even when they really need it, is the fear that they will never be able to get credit again. A lot of people mistakenly believe that bankruptcy results in permanent damage to your credit that cannot be repaired. The truth is that you can rebuild your credit after bankruptcy, and most people do.
In fact, while the bankruptcy will stay on your credit for many years, you are likely to find that you have the opportunity to obtain financing and credit as soon as a year after your filing. That means you can start rebuilding your credit much sooner than you might have thought. Reach out to a professional for more information about bankruptcy services.
