Things You Should Know About Bankruptcy
Posted on: 25 January 2018
Being overwhelmed by debts can be a stressful situation to find yourself facing. While it may seem as though escaping this problem will be hopeless, there are protections in place to help individuals that are experiencing an overwhelming amount of difficulty in paying their previous debts.
Know That Not All Debts Can Be Discharged Through Bankruptcy
Bankruptcy is one of the more effective options for those that need protection from their creditors. While this type of legal protection can greatly reduce the stress and difficulty that you are experiencing, there are limits to what it covers. For example, student loans and tax debts are both exempt from bankruptcy protection. Also, your debts that have been secured with collateral may be exempt from the protection, which can result in the loss of the collateral. The exact limits of the bankruptcy protection will depend on the type of bankruptcy that is pursed. This makes having experienced legal counsel essential if you are to be able to make smart choices about the type of bankruptcy to pursue.
Avoid Taking On More Debt Immediately Before Filing For This Protection
If you have decided that bankruptcy is an option that you will likely want to utilize, you should avoid taking on more debts before filing for this protection. As part of the bankruptcy process, your debt history will be analyzed. If it is discovered that you recently took on debt with the intent of having it discharged in bankruptcy, these liabilities may be exempted from the filing. As a result, you will still be liable for paying these debts.
Understand That Creditors Will Need To Cease Collection Actions
A key benefit of seeking the protection of bankruptcy will be that creditors must stop their collection actions against you as soon as you file for these protections. This can be invaluable in situations where you are facing foreclosures or repossessions as a result of your debts. In situations where creditors continue these actions despite the bankruptcy filing, you may be able to take civil action against them. If you are approached by creditors after you have filed for bankruptcy, you should refer them to your attorney.
Knowing what to expect and how you should proceed when it comes to filing for bankruptcy are important considerations for helping you to decide to pursue this option. Appreciating the limits of bankruptcy protection, the need to avoid taking on more debt prior to filing for this protection and the fact that your creditors must halt their actions against you at the time of filing rather than at the conclusion of the process will help you with making a choice about this type of legal protection.
Visit a site like http://www.haven-law.com/ for more help.
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