Bankruptcy is a legal process that can help individuals or businesses eliminate or repay their debts. It can be a difficult decision to make, but sometimes it is the best option for people struggling with their finances. Here are some FAQs about bankruptcy that can help you understand more about this process.

Four FAQs About Bankruptcy

1. What is Bankruptcy?

Bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts under the supervision of a court. There are different types of bankruptcy, but the most common ones are Chapter 7 and Chapter 13. Chapter 7 bankruptcy is also known as “liquidation bankruptcy” because it involves selling the debtor’s non-exempt assets to pay off their debts. Chapter 13 bankruptcy is also known as “reorganization bankruptcy” because it involves creating a repayment plan that allows the debtor to pay off their debts over a period of three to five years.

2. How do I Know if I Should File for Bankruptcy?

Filing for bankruptcy should be a last resort when all other options have been exhausted. If you are struggling with debt and can’t make your payments, you should first try to negotiate with your creditors or seek credit counseling. If these options don’t work, then bankruptcy may be an option to consider. You should also talk to an attorney to see if bankruptcy is the right choice for you.

3. Will Bankruptcy Ruin My Credit?

Bankruptcy will have a negative impact on your credit score, but it doesn’t mean that you won’t be able to get credit in the future. Bankruptcy stays on your credit report for up to ten years, but you can start rebuilding your credit as soon as your bankruptcy case is closed. You can do this by paying your bills on time, keeping your credit card balances low, and applying for credit only when you need it.

4. Can I File for Bankruptcy on My Own?

Yes, you can file for bankruptcy on your own, but it is not recommended. Bankruptcy is a complex legal process, and it is best to have an experienced bankruptcy attorney guide you through the process. An attorney can help you understand your options, prepare your paperwork, and represent you in court.

If you are considering bankruptcy, it is important to talk to a bankruptcy attorney who can help you understand your options and guide you through the process. Located in Lorain, OH, Riley, Resar & Associates, P.L.L. is a law firm that offers legal representation and guidance for individuals dealing with bankruptcy cases and can help you find the best solution for your situation. Call (440) 244-5214 or visit their website for more information.