Frequently Asked Questions About Bankruptcy

General Article

It can be a scary thing to contemplate filing for bankruptcy. Sometimes, though, it is the best thing you can do to get yourself out of the financial trouble you are in. Here are some answers to frequently asked questions about bankruptcy to help put your mind at ease.

How Much Debt Should You Have Before Filing for Bankruptcy?

Experts say that you should have at least $15,000 to $20,000 in debt before filing for bankruptcy. If you have less, it might not be worth the hit to your credit, and the court may question why you are even filing. Check with your Rockville bankruptcy lawyer to see what makes sense for your situation.

How Will Bankruptcy Affect My Credit Rating?

Bankruptcy will lower your credit rating, but not by as much as you would expect. If you are thinking of filing for bankruptcy, your credit might already be bad, so bankruptcy will not make it much worse. And shortly afterward, you will not have those old debts, so your credit might actually improve.

Will I Lose My Home and Car?

Your car or home might be ruled exempt in the bankruptcy case, so you may not lose them. Even if they are not exempt, you may be able to agree to keep paying on the home or car loan in order to keep them. Sometimes you may be able to pay only what the car or house is worth at the moment. Your attorney should be able to help you if you want to keep your car or home.

If you are thinking about filing for bankruptcy, you don’t need to worry too much. With the help of an attorney, you will be able to come through the bankruptcy in better financial shape than you were before, and you will not need to lose all your possessions to do so.