Things To Consider Before Filing Bankruptcy

Bankruptcy was considered a very bad thing in the past because a person files for Bankruptcy only when he has lots of unpaid debts. This always displays a very bad credit history but if you can file Bankruptcy at proper time then you can actually save lots of things and you can make your credit history look better than worse. The timing is important and there are lots of things that you need to consider carefully before filing for being bankrupt. If you are filing for chapter 7 then you need to know that there are some debts that you cannot include in this kind of Bankruptcy. For example you cannot include student loan in it and similarly you are not allowed to add child support debt in it because by law parents are responsible for their kid’s financial needs till he is an adult. You need to keep this mind and then you will also come to know the right time of filing for chapter 7 Bankruptcy. Another important point to remember is that chapter 7 Bankruptcy will stay on your credit report for coming 7-10 years. That means you will have to face the consequences of this Bankruptcy for long time and people will not take this Bankruptcy lightly. You will be deprived of quality loans and all the loans that you will qualify for will come with very high interest rate. If you have lots of financial assets then chapter 7 is just not the option for you.

Chapter 7 Bankruptcy does not protect your assets in long term. When you cannot go with chapter 7 Bankruptcy then you can avail a deeper plan of filing chapter 13 Bankruptcy. People have misconception that chapter 13 comes with very sleek advantages as compared to chapter 7 but you should not forget that chapter 13 Bankruptcy allows you to pay even your worst debts in a very feasible way without damaging your assets much. You can take Bankruptcy more as a plan to repay your debts in a reasonable way other than ending up losing everything. It allows you to repay your debts and still hold on to some of your crucial assets like your house and other necessary assets. You just need to find a better attorney that can guide you through the process more purposefully and can protect you as much as possible. Chapter 13 allows you to reduce the interest rate on all your debts and the principal amount stays the same as well. In most of the cases interest rate will come down to 5 percent from 13 percent and worth of your assets will also not fluctuate. You will be able to get certain benefits from your assets and even if you lose some of the assets you will not feel guilty about it because those assets will go with the highest possible market price. These are the things that you should keep in mind and decide the best kind of Bankruptcy that you can file for.