What You Need to Know About U.S. Bankruptcy and Credit Reporting
With the New Year here, more and more families are focusing on securing their financial futures and getting their finances in order. For many people, this is going to be difficult due to the failing economy of the past several years. If you are deeply in debt and staring down the barrel of several different creditors, you have probably considered filing bankruptcy, but you don’t know where to start or how filing bankruptcy will leave the shape of your credit. Well, you are not alone, as many people face the same worries and troubles everyday. Below, you will discover everything that you could possibly need to know about filing bankruptcy.
Bankruptcy Is Not a Quick Process
If you don’t know anything about bankruptcy, you probably think that bankruptcy courts are similar to small claims courts, which usually start and conclude in one single day. Unfortunately, this is not the case as all. In fact, some Chapter 7 bankruptcy cases can last anywhere from four to six months. A Chapter 13 case can last anywhere from three to five years, and a Chapter 11 case can last two years or longer.
You Are Going To Be Under Scrutiny
Do you find yourself uncomfortable when it comes to discussing your finances and how much money you make? Well, when you file for bankruptcy you need to know that your financial life, mistakes, and salary are all going to be open to the public. You will not only be required to list your debts, assets, income, transactions, and expenses, but you will also be required to attend meetings with your creditors. During these meetings, you will be asked a variety of probing questions right in front of a public audience. While everything is usually kept as civil as possible, your creditors will be allowed to ask you any question that they deem worthy.
Lasting Effects on Your Credit
While it is entirely possible to remove your credit report bankruptcy, it can usually take about two years to complete this process. When you file for bankruptcy you need to know that it can have a lasting effect on your credit report. In fact, this may make it extremely difficult for you to get a line of credit in the future. Many creditors and lenders might shut you out entirely or charge your outrageous interest rates. The only way to get around this is to put everything into improving your credit score and sticking to a strict budget. Only take on a small amount of debt that you can ensure that you will be able to pay back.
Bankruptcy Isn’t Cheap
Even though you are probably already facing financial hardships, bankruptcy can cost you a pretty penny. The cost of the bankruptcy is really going to depend on the fact if you need a lawyer or not. Hiring a bankruptcy attorney can cost anywhere from a few hundred dollars to a few thousand dollars. With that being said, you also need to know that preparing and filing your own case can be just as expensive because you will face substantial filing fees and courts costs.