Filing for bankruptcy isn't a decision you should make lightly. While this process can help right your financial situation, it can affect your credit score in the long term. You need a bankruptcy attorney to assist you throughout this process and help you determine the best course of action for your situation.
Austin & Dick PLLC handles Chapter 7 and Chapter 13 bankruptcies for individuals and businesses in the state of North Carolina. Contact attorney Dick now if you need an attorney in High Point, NC.
You may view filing for bankruptcy as a last resort for your financial situation. However, this process can help you manage your finances if you're:
- Facing a foreclosure or repossession
- Unable to pay for your necessary living expenses due to prior debt
- Stressed out due to creditor harassment
Unfortunately, most people who are contemplating bankruptcy already have bad credit scores. Every month that your creditors report negative information to the Credit Bureaus makes your credit score fall further. In many cases, the best option to rebuild your credit score may be to file a Bankruptcy petition. Once the debts are discharged the negative information stops accumulating. In part, your credit score is based on your debt-to-income ratio. Once your old debts are eliminated, this portion of the credit algorithm improves.
Yes, you can. Your credit will continue to reflect that you had debts that you couldn't pay, and these have been eliminated. The question for a lender is whether you will pay your new debts after the old debts have been eliminated? You will need to accumulate positive credit history after the bankruptcy to build your credit. In most cases, it is not difficult to get some small accounts that will report after your discharge. Obviously, interest rates will be steep initially, but if you have poor credit, you wouldn't be able to get favorable rates before you filed. You can build your score up over a couple of years.
The law allows you to keep certain types of property up to certain values when you file a bankruptcy. The process of protecting your property is referred to as "claiming your exemptions." The law is complicated in regard to what exemptions can be applied to certain kinds of property. However, the majority of clients we represent are able to protect all of their property in a bankruptcy filing. We examine the exemption issues before your petition is filed so that you know if you have property at risk before getting into the process.
Unless there is a compelling reason that you cannot attend a Creditor's Meeting, such as medical issues that make it extremely difficult or dangerous for you to appear, you will be required to make an appearance for a Creditor's meeting. These meetings, however, are not usually held in a courtroom, but held in a federal facility.
Many people are lured into debt settlement programs that fail to deliver the results that they promise. A number of these services offer to take care of your debts if you pay them a monthly fee for a number of months. After they contact your creditors, communications are directed to the service instead of to you. The break from the harassing phone calls may be appreciated, but it doesn't stop the negative information to the credit bureau. It also does not guarantee that the creditor will not sue you or start repossession or foreclosures proceedings. Additionally, you may owe income taxes on the amount written off by the creditor as the result of any settlement.
Maybe yes and maybe no. This is a complicated area of the law. It depends on what type of tax is owed, how long it has been assessed, whether tax liens have been filed and what sort of arrangements you may have previously made with the IRS or State Tax department. This is an area you would need to discuss with an attorney in detail.