Many people seeking debt relief are overwhelmed by the option. While there are several solutions for getting you out of debt and back on track, nearly all come with a barrage of questions. Here are some answers to some of the more common questions people ask about filing for bankruptcy:
Will I Lose Everything?
No. The bankruptcy process is designed to offer a greater level of asset protection than other methods of debt relief. For example, only filing for bankruptcy can halt a foreclosure while you negotiate a repayment solution with your lender. Bankruptcy exemption laws cover much of your essential living and property items. Depending on which chapter you file you could find that none of your property is at risk of liquidation.
Does My Spouse Have To File?
No. Filing for bankruptcy in marriage or with a partner does not require you to file jointly. The reason some couples choose to file together is that the bulk of their debts are jointly held, meaning they are both on the account as liable parties for repayment. Depending on your debt division and the types of debt you carry, you have the option to file together or separate.
Will My Employer Find Out?
Typically, no. There is no broadcasting of your bankruptcy filing information and your employer will not be notified. The cases in which an employer did find out would be if they conducted a credit check for some reason or you were already under a wage garnishment order. If you file bankruptcy and are already having your wages garnished your employer would likely be notified, but only to terminate the garnishment order. There is no workplace consequence for having filed bankruptcy. If for some reason you felt you were being discriminated against or unlawfully terminated by an employer on the sole basis of your filing, contact a lawyer right away. There are laws to protect you from discrimination regarding your case.
Will My Credit Be Ruined?
No. Chances are your high debt balances, missed payments and delinquent account standings have already caused damage to your credit. While a bankruptcy filing does remain on your credit report for several years, the bankruptcy notation does not actually damage your score. In fact, most people find their credit improves within the months after filing for bankruptcy. Resolved debt accounts and the removal of high balances improves your credit. Further, there are numerous lenders that are willing to extend credit to consumers after a bankruptcy. The credit recovery process can take time, but you are much more likely to see an improvement that continuing with high balances and missing payments.