Many bankruptcy advocates would lead you to think that filing for Chapter 7 or 13 is the solution to all of your financial problems, but that isn’t always the case. Bankruptcy can be beneficial during times of financial stress, but filing is difficult and can pose certain disadvantages. Below are five things a bankruptcy lawyer St. Charles MO may not tell you about filing for bankruptcy.
It stays on your credit: Chapter 7 may take six months or less to finish, and can wipe away many debts. However, the filing will stay on your credit report for up to a decade, and can make it hard to get credit later on.
It is a matter of public record: As a legal procedure, your bankruptcy will become a part of the public record, and your name and personal data will be accessible by potential employers, customers, businesses and banks.
It doesn’t get rid of all debt: You can get rid of unpaid tax bills over three years old, but if your tax debt is newer than that, you can’t get rid of it with bankruptcy. Student loans aren’t eliminated, either. The bankruptcy court can wipe away credit card and medical debt, but certain debts must be paid in full.
Filing can be expensive: People file for bankruptcy because they don’t have the money to pay their bills, but Chapter 7 or 13 cases must be handled by a lawyer, whose services can be expensive.
Missed payments can be disastrous: If you don’t make your payments under Chapter 13 bankruptcy, your court-appointed trustee can convert it to Chapter 7 liquidation, or your case can be dismissed. If your bankruptcy is converted, all of your non-exempt assets will be sold, and if it is dismissed, you’ll be liable for all debts accrued before filing.
Like any legal matter, bankruptcy is not to be taken lightly. Thousands of people successfully complete bankruptcy each year, but you should be aware of the benefits and risks before you file. Visiting to learn what to expect won’t eliminate all of your bankruptcy-related stress, but it can help you avoid many of the setbacks and surprises that come with filing.