Anyone can be affected by financial issues, which is why it’s good to stay informed of your potential solutions. One of these solutions is filing for bankruptcy, which may have several implications. If you’re not familiar with the details behind bankruptcy, it’s a good idea to find out as much as possible to ensure that you make an informed decision. Outlined below are four things you ought to know about bankruptcy. They may inform you considerably more about the process and some of its effects on your finance.
You Don’t Stand to Lose Everything
While you may think you’ll lose all your property and assets when you file for bankruptcy, this isn’t the case. This is because when you file for bankruptcy, all assets are seized, apart from your exempted ones, and sold to cover your financial obligations. When you’re discharged, you’re going to be debt-free. That said, it’s essential to work with a professional who will explain the details you need to know. They’re going to let you know which assets are exempt as well as those that aren’t. Generally, you’ll be allowed to exempt things necessary to maintain your job or your home.
Not Everyone is Eligible for Bankruptcy
Before you file for bankruptcy, remember that you may not be eligible for it in the first place. The qualifications for bankruptcy will also vary based on the type of bankruptcy in question. For example, for Chapter 7 bankruptcy, you cannot have filed for it in the last eight years. The case is different for Chapter 13, which you must have yet to file in the last six years. For both types of bankruptcy, you must finish a group or individual credit counseling course from an approved credit counseling agency within 180 days of filing.
While looking for an attorney to help you with this, you may also want to prepare an estate plan. According to Legal Zoom, about 50% to 60% of people don’t have wills. It’s best to secure your assets by writing a will to minimize the risk to your loved ones in case the worst happens. When you have an estate plan, you may have more peace of mind because you’ll have at least one thing in control.
You May Not Have all Your Debt Discharged
Another important detail you need to remember is that you will only have some of your debt discharged when you file for bankruptcy. Different jurisdictions and states will also discharge different debts, so it’s a good idea to talk to your lawyer for the specifics. Some of the debts that won’t be discharged typically include tax liens, child support and alimony, court fees, malicious and willful debts, injury resulting from driving while intoxicated, and fees for homeowners associations.
You Still Need to Maintain Your Home
According to the EPA, if your household is one of the 10% of those in the United States that have plumbing leaks, you may be wasting up to 90 gallons of water each day. You may also need to find alternative ways to pay for this. This is because this may be one of the things that homeowners associations typically charge for. Talk to your lawyer to find out if you can get this and similar issues taken care of. Also, check whether you have to source alternative funding to deal with them.
Keep these three things about bankruptcy in mind to safeguard your finances. You should enlist the help of a bankruptcy attorney to make sure that you don’t leave anything to chance. This may help you file the right way and manage your expectations for the best outcome.