Filing for bankruptcy is a decision that should not be taken lightly. While it will give you a very desirable blank slate for starting over financially, it will leave a huge impact on your credit rating for several years. These are three questions that you may have about filing for bankruptcy.
What Debts Are Not Included When Filing For Bankruptcy?
Many people are surprised to find out that there are some debts that will never go away when filing for bankruptcy. Some of these debts include:
While it is rare, a judge can make exceptions about these types of debts, but do not count on it. For example, if you have an illness that is debilitating and prevents you from earning money, it is possible to have these debts eliminated since you will never be able to pay them off.
Will All My Assets Be Seized When Filing For Bankruptcy?
Another misconception is that you will lose everything you own when you file for bankruptcy, such as your car, home, and remaining savings. This is not true, as the Chapter 7 form of bankruptcy lets you safeguard these assets from being seized.
Protecting your savings can be a tricky situation though, as there are a couple ways you can protect it. You will be able to put some savings into an exempt property, or an exempt vehicle if you don't own one already. Savings can also be used towards debts that aren't eligible for bankruptcy to help lower them.
Can I Give Assets To Friends And Family Prior To Filing For Bankruptcy?
It might make perfect sense to give away assets before filing for bankruptcy, but it is actually considered fraud. A judge will look at recent financial transactions, and transferring your assets to another person may result in criminal charges being filed against you. Speak with your lawyer about doing any financial transactions with your savings when filing for bankruptcy, as you do not want to create situations that could have legal repercussions.
Bankruptcy can be a great way to give yourself a fresh start and break free of the reigns your creditors have on you. If you feel like you are over your head in debt, meet with a bankruptcy attorney like Howard S. Goodman Bankruptcy Attorney, as they can give you a free consultation and decide if it is in your best interest to file for bankruptcy.
Share29 April 2015
Filing for bankruptcy has a tendency to make people feel ashamed and stressed out, and can turn into a big source of depression if not handled properly. As a counselor for couples and families, I have worked with various families throughout the years who have had to go through bankruptcy. And during this time, I have seen firsthand how, with the right mindset, going through bankruptcy can make people stronger in their financial lives and careers. I started this blog to provide information about the right things to do and the things that should be avoided while going through bankruptcy to minimize stress and maximize potential once the process is over. If you have any questions or concerns, hopefully they can be addressed on these pages.