The decision to file personal Bankruptcy is usually not one that is made lightly, and working with the right attorney can help you feel much more comfortable about the process. During your interactions with that attorney, there will be questions that come up. The more you communicate clearly and directly, the easier it will be for your attorney to prepare your case in the best way possible. Your personal Bankruptcy attorney is your advocate, and will work with you throughout the process of filing your Bankruptcy so you can get a fresh start. To interact with your Bankruptcy attorney more easily, here are four things you should know:
1. A BANKRUPTCY MAY NOT WIPE OUT EVERY DEBT
For people who file personal Bankruptcy in Arkansas, Oklahoma, or other states, being completely free of debt is often not possible. If you have student loans, or you owe money to the government for taxes, those debts are not going to be wiped away through Bankruptcy. What can be wiped clean are things such as medical debt and credit card debt. Working with an attorney can help you determine whether Bankruptcy will provide enough of a financial benefit to be right for you.
2. THERE IS MORE THAN ONE TYPE OF PERSONAL BANKRUPTCY
Most people just think of Bankruptcy as something that wipes away all of their debt, but there are two main kinds that are used: Chapter 7 and Chapter 13. While both can be viable options, it is important to understand which kind of Bankruptcy filing is best for your needs.
- Chapter 7 Bankruptcy: This is the option most people think of, and the one that is most commonly used. It wipes out many forms of debt, meaning that you will not have to repay the amount you owe, but not all types of debt can be included in this.
- Chapter 13 Bankruptcy: This is designed to help you protect your assets. You will have to repay the money you owe, but payment arrangements and amounts are restructured, or modified, so you can pay back your debt in a way that works for you and your creditors.
3. FILING BANKRUPTCY COSTS MONEY THAT WILL HAVE TO BE PAID
Bankruptcies are not free. To file Chapter 7, most consumers can expect to pay between $800 and $2,500, and Chapter 13 fees average between $2,200 and $3,200, depending on your location and other factors. That can make it difficult for some people to file, even if they really need to. Talk to your attorney about the options you have, as there may be ways you have not yet considered that can help you improve your financial situation or pay for your Bankruptcy proceedings.
4. CAR LOANS, HOME LOANS, AND CREDIT CARDS CAN BE MUCH HARDER TO OBTAIN AFTER BANKRUPTCY
Getting a loan, credit card, or mortgage after Bankruptcy can be difficult, and you may have to wait months or even years for some options to be available to you again. While that may not be a problem for some people, others can find it very difficult. If you have a car payment or mortgage at the time of the Bankruptcy, you may also be able to reaffirm that loan or note, and continue to make those payments while removing other types of debt.
Having an advocate on your side is an important part of the Bankruptcy process, and we are here to help. Contact Caddell Reynolds if you need a personal Bankruptcy attorney in Arkansas or Oklahoma at (800) 889-6944. We can work with you on your Bankruptcy case to provide you with the best options for your particular financial situation.