Filing for bankruptcy will have a dramatic impact on your financial life. When considering the steps you want to take to reclaim your finances and future, it's important to understand what the effects of filing will be. Here's a closer look at how the process will relate to some important aspects of your life.

Essential Bankruptcy Information Every Filer Should Know

1. Employment

A person cannot be fired from their job if they file for bankruptcy, whether they work for a private employer or for the government. This law also protects spouses of people who file. In most cases, an employer will not even find out that you have filed unless you tell them.

2. Time Frame

Most claims take three to five months to make their way through the court system before the final discharge is issued. Chapter 7 bankruptcy, which wipes away most unsecured debts, will stay on your credit report for up to 10 years after discharge. Chapter 13 bankruptcy, which consolidates debts into a long-term repayment plan, remains on credit reports for up to seven years.

3. Spouse's Role

If your spouse isn't responsible for any of your debts, the bankruptcy will not affect them. However, if they're a co-signer on an outstanding loan or a joint account holder on a past-due account, they will be considered solely responsible for that debt, and it cannot be included in the filing. When two spouses share unmanageable debt held in both their names, they should consider filing for joint bankruptcy.

4. Creditor Contact

Creditors can be relentless in their pursuit of unpaid balances, sometimes to the point of harassing consumers. Fortunately, as soon as you file for bankruptcy, the law requires that creditors immediately stop contacting you. If they continue to do so, all you have to do is refer them to your attorney.

5. Future Credit

You can—and should—take steps to start rebuilding your credit right away post-filing. However, in the months immediately following discharge, you might find it hard to get approved for new lines of credit. This is not unusual, but you still have options, the most popular being a secured credit card. With a secured credit line, you prepay a certain amount and spend from that amount. It's a low-risk way to rebuild your credit.

A lawyer will ensure you understand your rights and responsibilities at every stage of the bankruptcy process. Pearce Law Firm has been serving the Foley, AL, area since 1998. They provide representation in bankruptcy claims as well as DUI and drug-related cases. Call (251) 971-2676 or visit their website to schedule a consultation.