Bankruptcy questions

If you are on the verge of bankruptcy, you need to be prepared for the worst; you need to gather information about your further rights, restrictions and overall possibilities. You have to accept the facts, but try to think of it as a solution, as something that would put an end to your crisis. Bankruptcy is a shock to your credit score and to your general reputation, beyond doubt; however, it is a mere closure of all your responsibilities towards your creditors and lenders.

The few bankruptcy questions you need to know how to answer are whether bankruptcy puts an end to harassment on the part of your creditors, how can you arrange declaring bankruptcy, what would filing bankruptcy cost you and who are the ones affected by it. Let us take them one by one.

Would bankruptcy put an end to harassment on the part of your creditors? Yes, it would. After having filed bankruptcy, no creditor (bank or individual lender) has the right to claim repayments. The law protects you from any lawsuits, garnishee proceedings, even telephone calls from your former creditors claiming anything related to debt. Once you filed Chapter 7 or Chapter 13, all actions against you, the debtor, must cease. Liens would be lifted and you could be debt free.

How could you arrange declaring bankruptcy? Well, you would have to go to a meeting with your creditors, a trustee and an examiner in order to clarify your financial situation, to prove that you have no other option and that you cannot acquit your payments.

What would file bankruptcy cost you? This question is strongly related to the previous one. You would have to pay about $300 to file. A bankruptcy lawyer is what costs you a lot more- around $1,000, up to $2,000. The lawyer would offer you a free consultation when you first contact him, but he would claim further fees in case he had to attend the meetings with you.

Whom you being bankrupt would affect? Well, anyone who had signed a contract or an agreement that involves your debts. The purchase or the sell of a real estate, for example, requires both spouses’ signatures, thus, if you fail to repay a mortgage, foreclosure would definitely affect your husband or wife, in fact, it would affect the whole family. Likewise, bankruptcy would appear and stay on both of your credit reports for ten years, if the debt involves you both.

However, do not worry! You would be eligible for a new credit or loan in no time!