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5 questions to ask before filing for bankruptcy

On Behalf of | Jul 12, 2023 | Bankruptcy

Bankruptcy is a great process that helps many people recover from overwhelming debt obligations. 

Are you considering filing for bankruptcy? You may need to ask yourself a few questions first.

How often can I file for bankruptcy?

People can file for bankruptcy as many times as they wish. However, there is a waiting period before people can file the following time. For example, a Chapter 7 to another Chapter 7 bankruptcy typically has an 8-year wait time. Or, a Chapter 7 to a Chapter 13 bankruptcy may require people to wait 4 years. 

What is liquidation bankruptcy?

Liquidation bankruptcy is another name for Chapter 7 bankruptcy. What this means is that people who file for Chapter 7 bankruptcy may have their assets liquidated to appease creditors. However, only non-exempt assets are liquidated and this process rarely happens.

Will my credit score be hurt forever?

It’s true that filers will see their credit score plummet after filing for bankruptcy. Many people fear that their credit score is harmed forever when this happens. With careful consideration, most people recover their credit score.

Are all debts dischargeable?

While bankruptcy can discharge most debts, it can’t discharge all debts. Debts such as taxes, spousal and child support, alimony and some student loans aren’t eligible for bankruptcy. You can still discharge many debts, such as medical bills, credit card debt and loans.

What kind of bankruptcy should I use?

Many people pick Chapter 7 bankruptcy because it discharges a large amount of debt in a few years. People who have disposable income can file for Chapter 13 bankruptcy to reorganize their debt obligations. 

You may need to learn more about your legal options when picking the form of bankruptcy that works best for you. If your debt situation has gotten out of control, it may be time to explore the possibilities.


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