Things You Should Know About Bankruptcy Protection

When a person starts to accumulate debts that are simply too expensive for them to afford, it can be easy to feel as though there is no option for escaping these obligations. Depending on the types of the debts along with the personal finances of the debtor, bankruptcy may be a viable option for addressing these situations. yet, individuals that are experiencing these difficulties may fail to consider bankruptcy due to limited or inaccurate information about this protection.

Can Anyone File For Chapter 7 Bankruptcy?

There is often an assumption that a person will have to qualify to be able to file for bankruptcy protection. However, it should be noted that the qualifications of this type of protection can vary based on the type of bankruptcy protection that is being sought. For example, those that are seeking to file for a Chapter 7 bankruptcy will find that the qualifications for being able to file will be extremely low. In contrast, those that are seeking to file a Chapter 13 bankruptcy will need to show that they have a stable income that will allow them to pay off their debts if they are suitably restructured. 

How Long Will It Take To See Benefits Of Filing For Bankruptcy?

Individuals will often resist the idea of filing for bankruptcy protection due to the stigma that can be associated with it. This can lead to individuals facing extremely aggressive collection methods by the time that they decide to file for this protection. Luckily, it is the responsibility of the creditors to cease their collection actions against the debtor as soon as the initial bankruptcy paperwork is filed. This is designed to give the courts and the parties involved time to process the bankruptcy filing. If it is discovered that a creditor is continuing their actions against the debtor, they may face civil action or the court may erase the debt as punishment.

Will You Ever Qualify For Credit After Filing For Bankruptcy?

If you are concerned about your ability to recover your finances after filing for bankruptcy, you should be relieved to learn that individuals with a bankruptcy filing will still be able to qualify for credit in the future. Furthermore, individuals may find that they are able to qualify for credit in as little as a couple of years after this filing. This is particularly true when they make a concerted effort to stay up to date on their bills and other financial obligations so that they avoid negative credit reports.