5 Things to Know About Filing for Bankruptcy

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Filing for bankruptcy protection isn’t a decision that should be made lightly, but many people enter the process without knowing how it works. In this guide, potential clients can learn several important facts about bankruptcy protection.

Finances Become Public Record

Once a person files for bankruptcy, their finances become a part of the public record. While this may be embarrassing, it may help to be honest about financial mistakes and start with a clean slate. Those who file for bankruptcy must attend a meeting where they may face questions from creditors. The process can be uncomfortable, but it gives the filer a chance to explain themselves.

Failing to Practice Full Disclosure is a Serious Mistake

During a filing, it’s important for clients to include all pertinent information. If someone isn’t honest with their lawyer, they can’t do their job, and if it’s found that the person has hidden debts or assets, they may lose their discharge and face further investigation. The penalties that come with hiding information outweigh the few positives.

Discharges are Highly Personal

A bankruptcy discharge prevents creditors from making further collection attempts, but it only applies to the filer. This means that if a loan has a co-signer, that person is still responsible for the debt even after a discharge. It’s important to be mindful of this when family members or friends cosign for a loan, as one doesn’t want to leave them holding the bag.

Consider Hiring an Asset Protection Attorney

An asset protection attorney can work along with a bankruptcy lawyer to ensure that the client gets the most benefit out of the process. They may be able to protect retirement plans, life insurance policies, marital assets, and more. With a lawyer’s help, families can ensure that they don’t unnecessarily lose things during the process.

It Can Take a While

Many people underestimate how long a bankruptcy case can last. The average time for Chapter 7 is four months; Chapters 11 and 13 can take much longer. Whichever type a client chooses, they should be prepared to go through the entire process. Visit kanialaw.com or call today to schedule a consultation.