Five Things To Know If You Are Thinking About Filing Bankruptcy
Bankruptcy is often a great way to clean your financial slate and start fresh. However, the process is also largely misunderstood. Filing bankruptcy is not as simple as just filing paperwork before the court discharges your debt. If you are thinking about filing bankruptcy, below are five important things to know.
The Process is Not Always a Quick One
The process in some courts, such as small claims, is a relatively quick one, with most cases being decided in one day. The bankruptcy court does not operate this way. The most common type of bankruptcy filed by consumers, Chapter 7, can still take some time, with the average case lasting four to six months. The second most common type of bankruptcy, Chapter 13, takes even longer. In a Chapter 13 bankruptcy, debts are reorganized into a payment plan that is more affordable for consumers to pay. A Chapter 13 bankruptcy can take anywhere between three and five years before the process is considered final.
Bankruptcy Records are Public
For most people, it does not really matter that bankruptcy records are public. Most people do not spend a great deal of time searching for the financial records of the people they know. Still, if you have financial matters that you do not want people to know, it is important to know that bankruptcy records are public and so, people can learn about your financial position if they choose to.
You Must Be Completely Honest
You will have to fill out a lot of paperwork when filing bankruptcy, and you will have to provide a lot of information about your finances. You must provide full disclosure and be completely honest when providing this information. If you are not, you could face serious consequences, including charges of bankruptcy fraud.
Bankruptcy Discharge is Personal
The bankruptcy process will only consider debts that you personally owe. If your debts are discharged, it is important to remember that only your debts are discharged. This is especially important if you have cosigned a debt for someone. After you file bankruptcy, that loan you cosigned for is not erased, and the creditor can still try to recover the debt from the other party.
Bankruptcy will Affect Your Credit Score for a Long Time
After filing Chapter 7 bankruptcy, it will usually take about two years before your credit starts to recover. Some creditors still will not consider loaning to you after this time. That does not mean, however, that you will not be able to obtain credit at all. In fact, some creditors will be eager to loan you credit in exchange for hefty interest rates or other fees. Regardless, after you file bankruptcy, it will take some work to rebuild your credit to what it was, or better, before you filed.
Call Our Bankruptcy Lawyer in Orlando Today
When filing bankruptcy, there is a lot to know. At Anderson & Ferrin, our Orlando bankruptcy lawyer can advise on your case, the law, and how a discharge will affect you now, and in the coming years. Call us today at 407-412-7041 or contact us online to schedule a free consultation.