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Things to Know Before Declaring Bankruptcy

The Statue of JusticeOct. 9
At Rego Law, we focus on a wide range of legal areas, including bankruptcy law. If you are thinking about declaring bankruptcy, our experienced and dedicated team is here to help. However, bankruptcy isn’t the best solution for everyone. And even if it is the right choice for you, there are a few things you should know before declaring it. The following are just some of the things to be aware of going in.

One of the most important details about bankruptcy is that it can solve some problems but can’t do everything. For example, in most cases declaring bankruptcy can stop debt collectors in their tracks, get rid of your legal obligation to pay off your debts, help you get your driver’s license back if you’ve lost it because you didn’t pay damages for an accident, and even prevent the termination of your utility services.

However, as we mentioned, there are a few things that bankruptcy can’t do. If you have a cosigner on any of your loans, they are still obliged to pay off what is owed. In addition, declaring bankruptcy won’t get rid of any debts you incur after going bankrupt, and it won’t absolve you of paying things like child support, alimony, student loans, and most taxes.

In addition, there are several different types of bankruptcy, including Chapter 7 and chapter 13. Chapter 7 is ideal for people who are looking for a fresh start. Declaring it will get rid of your debts, but you will also liquidate many of your assets, including property. On the other hand, Chapter 13 is more of a reorganization of your debts. You get to keep your property, but you will still have to pay off most debts eventually.

The bankruptcy public record is deleted from the credit report either 7 or 10 years from the filing date of the bankruptcy, depending on the Chapter you file. A bankruptcy filing also does not mean the end of obtaining credit, and in fact, you can try to speed up the removal process while also rebuilding your financial profile. Review your bankruptcy filing and the items related to your bankruptcy that appear on your credit report. If you find any incorrect information, you can file a dispute with the credit bureau. Any error in the way information was reported is grounds for having the incorrect information removed from your credit report.

If you have any questions about declaring bankruptcy, we’re here for you. Contact us to learn more or for a free initial phone consultation with one of our attorneys if you are considering declaring bankruptcy.