Debt Problems: 4 Facts To Understand About Bankruptcy Procedures

At one point, the bills are being paid on time. Money is in the bank, and life feels good. Then, in the blink of an eye, things can change, leaving the most responsible people feeling like they’re drowning in debt. All isn’t lost. Bankruptcy laws were created for these very situations, offering many people a chance a second beginning. If you’re looking to get back on track, investigate this route, considering the following four points.

1. It Shouldn’t Be Done Alone

The filing process is very technical, following very specific state laws. Look for guidance from a reputable bankruptcy lawyer Rockville MD who can work with you to understand the expectations and protocols. You’ll want the event to run as smoothly as possible. 

2. It Can Impact Credit Scores

Chapter 7 bankruptcy does impact a credit report. The courts assume most of your valuables, selling them off to pay your major bills. They then wipe away any accrued credit card bills. The benefit of this path is a fresh start. Creditors, though, put in on the official paperwork for up to 10 years, so expect it to be a bit harder to get a loan for a bit.

3. It Doesn’t Always Mean You Lose Possessions

Chapter 13 permits reorganization rather than liquidation. Your personal items remain with you, but you’ll still have to pay on them. The bills simply get stretched out into new, longer payments over the course of several years. 

4. It Doesn’t Impact Your Home

Even under a Chapter 7 deal, your primary residence may be safe. Many states views these locations as necessary for living; thus, the place is often left untouched. The mortgage company, however, can declare foreclosure, so continue to make your payments if you want to stay.

Bankruptcy isn’t the end. Instead, it’s the start of something new, an opportunity to renew yourself and your livelihood. Just be prepared for the sacrifices and legal expectations that come with it.

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