There are few benefits to filing for bankruptcy. A bankruptcy filing can follow you on your credit reports for up to 10 years and can keep you from obtaining a new mortgage for two to three years. It may also prevent you from being able to open a checking or savings account or prevent access to your current accounts for a period of time. Most people try to file for Chapter 7 relief, which allows you to eliminate all or most of your debt; but ONLY if you qualify.
Depending on the amount of income you earn, qualifying for a Chapter 7 bankruptcy filing may be difficult. Frequently, the Judge may reclassify the filing as Chapter 13, which basically means the court is going to acquire your income, give you back an allowance, and use the rest of your money to pay off your creditors. It is not uncommon for a Chapter 13 filing to stay in effect for five years, with the court supervising what you spend during that time. Although this is an appropriate option at times, you should explore all options available to you before simply filing for bankruptcy.
If you are committed to filing bankruptcy as a means to achieve debt relief, we urge you to consult with a bankruptcy attorney for sound legal advice before you take action. Contact us for referrals to qualified bankruptcy attorneys.