How Does Bankruptcy Work?

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How Does Bankruptcy Work?

Filing for bankruptcy can seem like a scary prospect in some people’s minds. However, many people don’t know that filing for bankruptcy can actually be one of the first steps towards financial recovery. Bankruptcy is not so much an end as it is the beginning of a process designed to help the person deal with their debt in way that is reasonable and fair for creditors.

What Are Some Effects of Bankruptcy?

Bankruptcy works by accomplishing steps such as:

On the other hand, filing for bankruptcy can also have some other effects in different areas. For instance, some bankruptcy proceedings can affect a person’s credit ratings. While most people filing for bankruptcy already have unfavorable credit scores, this is something to keep in mind before filing. Bankruptcy can also affect other areas such as child support or spousal support. In fact, bankruptcy can potentially affect any legal issue that involves a person’s assets or estate.

Who Can File for Bankruptcy?

Bankruptcy is usually available for any person who:

Lastly, there are some filing deadlines and wait periods associated with bankruptcy. For instance, once a person files for Chapter 7 bankruptcy, they need to wait another 8 years before they can file again under the same Chapter.

Do I Need a Lawyer for Help with a Bankruptcy Claim?

The bankruptcy process can sometimes be difficult to understand. You may need to hire a bankruptcy attorney if you are considering filing for bankruptcy. Your lawyer can provide you with legal advice and guidance during the process. Also, your attorney can keep you informed of any updates in the law, as bankruptcy laws are subject to change.

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Last Modified: 07-25-2014 12:03 PM PDT

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