More than 750,000 individuals filed for bankruptcy last year and even more would qualify for the process. It’s a common situation that many people find themselves in but that doesn’t make it any less confusing.
If you’re one of those 750,000 you likely already know the answers to questions like “what is bankruptcy”, “what happens when you declare bankruptcy”, and “how to declare bankruptcy”. But you may have other unanswered questions and that’s what we’re here for! We want to make sure you have all the information you need to get back on your feet!
We’ve compiled a list of the top 13 questions that you should ask your bankruptcy attorney.
1. Will Bankruptcy Negatively Affect My Credit Report?
The biggest concern that many who are filing for bankruptcy have is how it will affect their credit scores. Chances are if you’re in a situation that bankruptcy is an option, your score has already taken a hit and you don’t want it to lower anymore.
In short, it will impact your overall credit rating but the specifics vary depending on each case.
Most people who file for bankruptcy are required to take courses that will help them have the tools to make smarter financial decisions in the future and repair the damaged credit score.
2. How Long Does Bankruptcy Stay on Your Credit Report?
The good news is that even though filing for bankruptcy will lower your credit score, it won’t stay that way forever and you can work towards raising that number back up.
But many want to know how long it will stay on their report for any possible lenders to see.
Generally, a bankruptcy filing will stay on your credit report for seven to ten years (again depending on your specific circumstances). Your atoner may be able to give you a more solid answer based on a variety of factors.
3. What Kind of Paperwork Do I Need?
Filing for bankruptcy isn’t as easy as filling out an application and sending it in. There’s a lot of work involved and steps that have to be done, all correctly and in the right order. It’s absolutely critical to get everything submitted in the right way to be approved.
One of the best things you can do is ask your attorney during your initial meeting for a list of everything you need to submit and when. This will help you stay organized and prepared. You can work on finding everything on the list before it’s due to make the whole filing go much smoother.
4. Who Files All of My Paperwork?
Generally, you’ll bring all of your paperwork and necessary documents to the meetings with your attorney. They’ll then file the application (with those documents) on your behalf.
This is the main benefit of working with an attorney during a bankruptcy filing because they have a full understanding of the process and can guide you through it.
In some firms, the attorney isn’t the one who is preparing your file because they have assistants or paralegals to handle that. This is perfectly acceptable and legal but it’s important to ask who is handling things just to make sure you’re comfortable with the arrangement.
5. Can I Keep Any of My Assets?
One of the biggest downsides of filing for bankruptcy is that, occasionally, assets can be taken to pay off debts. This is obviously the worst-case scenario for many people.
When you bring your list of assets and debts to your attorney, make sure to ask which assets could be considered exempt and for a plan to keep as much as possible. When you’re working with an experienced attorney, they’ll be able to help you come up with the best plan possible.
6. Does My Case Look Solid?
Not all bankruptcy cases are cut and dry, in fact, most aren’t that way. It’s important to ask your attorney if there are any risks in your case and any potential negative consequences.
For example, your attorney will be able to let you know if you have a certain debt that’s less likely to be forgiven than others. Or if you’ve sold a property within the last few years if that counts as a fraudulent transfer or not.
7. Will Anyone Come to Court With Me?
Most of the work in filing for bankruptcy comes in the preparation. Meeting with your attorney, gathering documents, and attending any courses required by the state. But there is most often also a court hearing as well.
In order to be the most prepared, you should ask your attorney who exactly will be in court with you (if anyone) and also how the proceedings normally go.
It can be intimidating to go to court, especially if you’ve never been before. So mentally preparing with a clear vision can help ease nerves and boost confidence.
8. What Does My Financial Situation Look Like After Filing?
Life after a bankruptcy obviously looks a little different for everyone but most people find it to be a little difficult for a while while they rebuild.
In most bankruptcy cases, extra assets are taken to go towards your debts. This means you’ll have little savings or retirement, if any. But most get to keep their personal possessions, homes, and cars. Credit scores are also impacted making it harder to get loans for future purchases.
You can ask your lawyer for an idea of what your specific situation will look like and how long it will take you to regain what you’ve lost.
9. How is My Monthly Payment Plan Determined?
For those who choose to file for Chapter 13 bankruptcy and have a monthly payment for all of their combined debts, it’s important to know how your payment is determined and what it will be.
Your attorney likely won’t know what your payment will end up being specifically. But they can help you understand how the number is determined and what will factor in. They may even be able to give you a rough estimate so you can begin to prepare.
10. Do I Have Any Other Options?
Before you move forward and officially file for bankruptcy, make sure to ask your attorney if there are any other options available to you. If you have a good attorney, they’ll give you straightforward advice based on the details of your specific situation.
Some alternatives could be selling certain assets to get the capital you need or a debt consolidation loan. Both of those are options that could be used to get you more time to change your financial habits and improve your situation.
Bankruptcy isn’t a cure-all and comes with consequences. It should only be chosen when there’s no other option.
11. Did I Choose the Right Bankruptcy Option?
There are three different options for filing bankruptcy; chapter 7, chapter 11, and chapter 13. Each provides a different course of action and applies only to certain situations.
It can be confusing to know which option is the right one for you. At your initial meeting, your attorney will help you determine which option best fits your situation and the outcome you’re looking for. It’s important to pick the right choice in order to get approval and be able to move forward, which makes this a critical question to ask.
12. What Do I Have to Do After Filing?
There’s a lot of talk and advice out there for what to do before and during the process of filing for bankruptcy. But there’s not a whole lot of information on what you need to do after filing for bankruptcy.
When you ask your attorney about what you need to do after filing, they’ll give you advice based on the experiences of their past clients. Including any steps required by the court, courses you need to take, and ways to rebuild.
13. How Do I Avoid Bankruptcy in the Future?
Once you’ve gone through the bankruptcy process, you know that it’s not pleasant and a lot of hard work. You’ll want to avoid going through the whole process again in the future.
But you may have questions about how to do that and what steps you need to take to protect yourself from getting in over your head again.
Your attorney can give you advice and recommend other professionals who can help you get back on the right foot. Following this council will give you the direction you need to have a more solid financial situation that won’t leave you hurting.
Getting Through Bankruptcy with Your Charlotte Bankruptcy Attorney
Filing for bankruptcy isn’t a very fun process but it’s also very helpful when you find yourself in a tricky situation. The best way to make the process as smooth and simple as possible is to be prepared.
When you go into the whole process with a clear understanding of what to expect and what’s expected of you, no surprises will jump up and catch you off-guard. Then you can get back to normal life and move forward as quickly as possible.
If you’re in need of advice or are ready to get started filing for bankruptcy, contact us today!