It can be a daunting and stressful process to declare bankruptcy, but knowing the rules and having on your side an experienced bankruptcy attorney can help lessen the pains.
Chapter 7 bankruptcy will write off most unsecured debts within 90 days of filing. The bankruptcy will stay on your credit report for 10 years, and while your debts are forgiven, you may have to sell off some property and those proceeds will be distributed to creditors.
Chapter 13 bankruptcy will establish a repayment plan (three or five years) to repay the debts. This will remain for seven years on your credit report, but you’ll get to keep all your property.
When does each make sense?
Chapter 7 can make sense if you no assets (house, car, etc.) to lose, but you may be forced to sell valuable belongings. Chapter 13 is recommended for those who fell behind on payments thanks to a job loss or medical problem, but can pay if given time.
Credit: What happens and how do I rebuild?
You’ll get a notation on your credit report of filing for bankruptcy. Your credit score will most likely take a hit, but how bad depends on what your score was prior to filing. This won’t be forever the case.
Rebuilding credit might be troublesome for filers, as credit got them into this predicament after all. To rebuild, you’ll need to make sure the accounts on your report are all at a zero balance. Then, get credit cards (consider secured ones) and pay them off every month. Another way to rebuild may be to ask a friend or relative if they’ll let you piggyback on their credit.
Don’t go into bankruptcy alone. Kanzer and Associates has a qualified New York bankruptcy attorney that can help you. Enlist our services today by visiting www.KanzerLaw.com.
