Before you decide to file for Chapter 7 bankruptcy, you should make sure you fully understand the process and effects of it first. Understanding certain things before you file is important, as this can help you determine if you really need to file, and here are four important things you should know before you file your documents.
You will probably have to pay for it in full prior to filing
The first thing to know is that filing for bankruptcy is not free. You will have several different fees you must pay, and you typically must pay these before filing your case. The fees will include court fees, also called filing fees, and legal fees, which are the fees your lawyer will charge for handling your case.
It may not eliminate every debt you have
Secondly, you should never assume that a Chapter 7 bankruptcy filing will automatically eliminate every debt you have. While there are times when this is true, there are more times when Chapter 7 does not eliminate all debts. Chapter 7 is great for eliminating qualifying debts, including credit card bills, but it does not eliminate debts such as child support or student loans. Make sure you know exactly what debts will be eliminated and which will not be before you file, simply so you fully understand the benefits it will have on your finances.
There might be an alternative way out of debt
You should also know that bankruptcy is not always the best option; however, it can be for some people. You will have to take a course in credit counseling prior to your filing, and this course will help you decide if bankruptcy is right for you, or if you should look into an alternative option for becoming debt-free.
Filing will stop all communication from creditors
One huge benefit you should know about is something called the automatic stay. This is a court-ordered requirement for all your creditors to stop communicating with you, and the bankruptcy court will issue it as soon as they receive your paperwork. This means that you will no longer receive texts, emails, letters, or phone calls from any creditor listed on your bankruptcy documents.
These are four important things you should know prior to filing for Chapter 7. If you have questions about these things or anything else related to bankruptcy, contact law firms like Martinez Law Firm to speak with an attorney today.Share