1. Is filing for bankruptcy the right choice for me?
Most experts agree that bankruptcy should be your last resort since it's a major financial decision that'll affect your credit report for the next 10 years. If you can, you should first try to negotiate with debtors, consolidate your debts or sell your house.
2. Which bankruptcy option should I take?
Most people don't realize that there are six bankruptcy options, of which Chapters 7 and 13 are the most common. If you have a lot of debt and no income, Chapter 7 can give you a clean slate whereas Chapter 13 allows you to create a three-five year repayment plan. If you own a business, Chapter 11 might also be a good option. Talk with your bankruptcy attorney for more information.
3. Will filing for bankruptcy get rid of all my debts?
Before filing for bankruptcy, it's important that you take a close look at all of your debts. If you have mostly credit card debts, bankruptcy can be an enormous help. However, bankruptcy will not discharge your student loans, alimony or child support obligations.
4. Will I be able to borrow again?
Though filing for bankruptcy will hurt your credit score, it is possible to successfully apply for credit cards or loans; unfortunately, you'll likely receive high interest rates. Once you begin to rebuild your credit and show that you can be a reliable borrower, you'll start to see favorable credit card offers again.