If you have spoken with an experienced lawyer, you may have broached the possibility of filing for bankruptcy in an attempt to save your home from foreclosure (or simply because you really have no other option). Bankruptcy in Phoenix is increasing as people are finding it harder and harder to deal with the credit they have mounted up. There are a few things you should speak to your lawyer about before deciding to pursue the course of bankruptcy:
- Do you qualify for a “Homestead Exemption”?
- Which chapter of bankruptcy would best suit your circumstance?
- What property will you keep/lose after filing bankruptcy?
- How much does filing bankruptcy cost?
Bankruptcy will show on your credit record for 10 years, however this can be both good and bad, depending on how bad your credit is before filing bankruptcy. If you have a history of several unpaid credit bills—that can sometimes look worse than filing bankruptcy and then making good on any payments you incur afterward. As bankruptcy wipes out your old debts, you are likely to be in a much better position to pay your bills, which may allow you to start building new credit.
Many financial advisers strongly recommend that you avoid bankruptcy at all costs, however sometimes that is the only option left for a person. If you are considering this option, you should be aware of the repercussions that can follow. For instance, do you have a co-signer on any of your loans? If you file bankruptcy, your co-signer will have to pay the remaining debt on the loan. Also, if you have any joint debts with a spouse and only you file for bankruptcy, the fact that you discharged the debt could look bad on your spouse’s credit.
If your lawyer strongly believes that filing bankruptcy is your only chance of keeping your home, it’s up to you to decide whether or not the process is worthwhile.
