Filing for bankruptcy is a big step for anyone, and it’s not one that should be taken lightly. You don’t want to rush into the process with considering all the consequences. It will have effects on your credit, and there are effects that may not fit every debtor. There are several things you must remember when filing for Chapter 7 or Chapter 13.
Co-debtors
These are the people who have signed with you on a debt, like a mortgage or car loan, and are often close family and friends. If you’re filing for bankruptcy, these co-signers are now left in a tough circumstance, as they may be solely responsible for these debts.
Do you want to kill your debt as quickly as you can? Chapter 7 bankruptcy will assist in this effort, but your co-debtors won’t be protected, leaving creditors able to collect from them. You can protect your friends and family with a Chapter 13 bankruptcy repayment plan, but the downside is you are guaranteeing to creditors a 60-month schedule to pay to them your disposable income.
Playing favorites
If you have one debt that’s more overwhelming than the rest, it might be easy to play favorites. Maybe you have $10,000 in credit card debt that’s leaving you in the lurch, or you owe someone a huge loan. Unsecured creditors include credit card companies and those who lent you money with no collateral backing, like a car loan or mortgage.
Having a bankruptcy attorney in these situations is immensely important, as it will help you to avoid accidental fraud. If you decide not to include the huge loan in your filing, so it won’t be discharged, this could lead to your case being discharged. All your records will be reviewed, and there is nothing to stop you from repaying a discharged debt.
Non-discharged
If your aim is to get rid of all the debt you can, you must know what types of debts you have. Mortgage payments, for example, are secured debts and must be repaid. Other secured debts include taxes, student loans, child support and alimony, among others. If these make up the bulk of your debt, filing for bankruptcy won’t assist you greatly.
Need a New York City bankruptcy attorney? Get in touch with Kanzer & Associates by visiting www.KanzerLaw.com.
