Falling into debt is a common problem that millions of people will experience at some point in their lives. While it is usually possible to pay off these debts with hard work and some time, this is not always the case because some people may be in a situation that makes it impossible to repay these debts. When this is the case, filing for bankruptcy protection may be the best option for freeing yourself from the crushing burden of excessive debt. Yet, most people have an extremely limited knowledge about filing for bankruptcy, but learning the following answers for some routine questions may help you feel more comfortable with considering this option.
Do You Have To Disclose All Of Your Debts?
Some people may approach filing for bankruptcy with the idea that they will be able to pick which debts are restructured or forgiven. As a result, they may only want to list a portion of their total liabilities. Sadly, this is not how the bankruptcy process works, and you will be required to list every creditor that you have.
While this may seem excessive, it is designed to ensure that you have a clean start when the bankruptcy is finished. If any debts are not included in this proceeding, you may not find relief from them, and this can lead to complications when you are rebuilding following the bankruptcy. Luckily, an attorney (such as Howard S. Goodman Bankruptcy Attorney) will help you conduct a thorough background check to ensure that there are no debts that were missed.
Will A Bankruptcy Permanently Ruin Your Credit Score And Worthiness?
A common idea is that creditors will always be able to see your bankruptcy, and this will make it impossible for them to ever be approved for loans or lines of credit. This concern may make them avoid seeking this protection because they may think it will ruin their finances for the rest of their lives.
Luckily, this is not the case, and your bankruptcy will only be visible to creditors for a set number of years. Also, many lenders will consider your credit history since the bankruptcy more important than the bankruptcy itself and your history before it. This means that as long as your stay current on your bills following this filing, you should have no problem quickly rebuilding your credit.
Filing for the protection of bankruptcy is one option for those with crushing debts to find relief. However, it is important for you to understand this process and the effects it will have before you make a decision. Knowing the importance of listing all of your debts and that this filing will not permanently damage your credit may make this process less intimidating when you are considering your options.