Have you been thinking about filing for Chapter 7 or Chapter 13 bankruptcy but aren’t sure if it’s the right decision for you and your family?

Before making such a large decision as this on your own, numerous factors should be considered. The following is a list of questions to ask yourself before concluding that bankruptcy is right for you.

First, let’s take a look at the two most common types of personal bankruptcy available to individual filers in the U.S.

Chapter 7 vs. Chapter 13 Bankruptcy

At Clark & Washington, Attorneys at Law, we can help you decide whether Chapter 7 or Chapter 13 bankruptcy is right for you. Here’s what you need to know about each type of bankruptcy:

Chapter 7 Bankruptcy

Chapter 7 bankruptcy generally allows you to clear up much of your debt in approximately three to six months. The downside is that you will often lose personal property in the process.

Chapter 13 Bankruptcy

With Chapter 13 bankruptcy, you’ll be put on an income-based repayment plan first, which will help you reduce much of your debt over the next three to five years. After that, some other debts may be discharged by the court.

Questions to Consider Before Filing for Bankruptcy

Do you qualify for Chapter 7 or Chapter 13 bankruptcy?

Different qualifications exist for different types of bankruptcy. For example, you have to pass a means test in order to be eligible for Chapter 7 filing. Generally, this means that if you make too much money, you may not qualify. The court will largely be looking at your disposable income each month in order to determine your eligibility.

In some cases, those who are ineligible for Chapter 7 filing can still file for Chapter 13 bankruptcy. Speaking with one of our attorneys will help you know which type of bankruptcy you would be eligible for.

Do you have any debt that can’t be eliminated?

It’s a common misconception that filing for bankruptcy immediately means all of your debt will be expunged. In fact, there are many types of debt that won’t get eliminated even when you file for bankruptcy. One of the most notable types of debt that can’t be expunged through bankruptcy is student loan debt. In some unique cases, undue hardship may allow you to get rid of student loans, but it’s rare.

Other types of debt that may not be eliminated through bankruptcy include secured debt (mortgages and car loans), property liens, and alimony and child support.

Do you have any other options before bankruptcy?

Going directly to bankruptcy in order to fix your financial problems is not a wise move for everyone. For instance, with some individuals, couples, and families, it might be worth speaking to your individual creditors to come up with an interest- and fee-saving solution through their credit counseling programs. Certain credit card companies, for example, will close your credit card account and allow you to get on a low-interest payment plan in order to pay off debt.

Did you know bankruptcy costs money?

Contrary to popular belief, you do have to pay fees in order to file for bankruptcy. Attorneys charge their own fees, and there are court filing fees associated with this action as well. Be this as it may, in many cases, the fees associated with filing for bankruptcy still pale in comparison to how much you can save by taking this action when you are deeply in debt.

Are you aware of how long bankruptcy stays with you?

One of the big things to know about bankruptcy is that it will be on your credit report for 10 years. This means that in those 10 years, you may have a hard time using your credit score and credit report for big financial decisions in your life. For example, if you have recently declared bankruptcy and you are trying to get a loan for a new home, you may be denied this option. Additionally, having bankruptcy on your credit report can make it difficult to land a job, get insurance, or even rent a new apartment.

Our Atlanta Georgia Bankruptcy Attorneys Are Here to Help

Being deep in debt can be overwhelming and stressful on a daily basis. The good news is you have options. Our Atlanta Georgia bankruptcy attorneys can help you get a fresh start with your finances. Contact us today for your free, no-obligation consultation. We’ll help you navigate your situation and explain to you your rights and options.