The decision to file for bankruptcy in Southwest Florida, is a major decision that shouldn’t be taken lightly.
It’s not just an easy way to get rid of all your debt, and it has long-standing consequences that will affect your life for years to come.
Chapter 7 bankruptcy is known as straight bankruptcy, or liquidation. With this type of bankruptcy, a debtor agrees to sell their assets through a court-appointed third party and use the proceeds to pay off their debt.
Although it sounds simple enough, you must explore the different types of bankruptcy and understand how filing for chapter 7 will affect your life.
Your Credit Score Will Tank
Before you can even file for chapter 7 bankruptcy, you must attend an approved credit counseling session.
Some people file for bankruptcy because they don’t realize there are other ways to get a handle on their debt. Medical bills, defaulted loans and other expenses make it hard to imagine there’s any other option, but credit counseling can walk people through various avenues of repayment, making sure they fully understand their options before filing.
After you file for bankruptcy, your credit score will plummet. Chapter 7 bankruptcy will stay on your credit report for 10 years. This can make it a challenge to get improved for a mortgage, car loan or other important things in the future.
You Can’t Keep Everything
When filing for bankruptcy, retaining belongings changes from state to state since state laws and value determine what a person is allowed to keep. In some cases, you may lose your house or vehicle.
Make sure you extensively research the state laws for chapter 7 in your state and understand what’s at stake. You need to plan ahead and not assume life will automatically fall into place after you file.
In order to stay debt-free and avoid significant emotional distress, you need to have a financial plan in place, shelter secured and designated plans to help you rebuild.
Bottom Line….There May Be Alternatives
Bankruptcy isn’t the right choice for everyone; you may have so much debt that you don’t even know where to begin with repayments.
The best thing you can do before filing for chapter 7 bankruptcy is to speak with a credit counselor.
Debt consolidation could make your repayments more manageable, and you may even realize that some of the debts you believe you owe are inaccurate or no longer applicable.
Working with a credit counselor will help you develop better budgeting skills. You’ll also learn more about how debt works and how you can avoid it in the future.
If you’re looking to get some quick money to help settle your debts, we can help! Contact us today so we can give you an offer on your house and get you the money you need to meet your obligations and hopefully avoid bankruptcy in the first place.
*** For informational purposes only. Please seek the guidance of an experienced bankruptcy attorney or credit counselor.