Bankruptcy Frequently Asked Questions (FAQs)
Many people think there is a stigma associated with filing bankruptcy but that’s simply not the case. More and more people nowadays have nowhere else to turn when they are facing seemingly insurmountable debt, and we are all guaranteed a fresh financial start under the federal Bankruptcy Code.
At The Law Offices of William T. Peckham in Austin, we help clients through all the challenges that come with overcoming their debt. We understand you may have a variety of questions about the bankruptcy process. These are some of the bankruptcy questions we hear most often from our clients:
- What are the types of bankruptcy? There are multiple types of bankruptcy. Chapter 7 is the most common, and discharges most of your debt, but has the greatest impact on your credit score. Chapter 11 and Chapter 13 involve reorganizing debt into more affordable payment plans, though Chapter 11 is often reserved for business owners and companies.
- Will I lose my house or my car? Not necessarily. An experienced bankruptcy attorney can help you plan so you can keep your most valuable assets. Things such as your home mortgage and your car could be exempt from liquidation, so you can keep them even after declaring Chapter 7 bankruptcy.
- Will all my debts go away? Under Chapter 7, most of them will. But some debts are difficult to discharge — this can include student debt and tax debt, among others.
- But won’t it hurt my credit score? Unfortunately yes, it will hurt your credit score. But if you continue to miss payments and accumulate more debt, your credit score may be impacted even more severely, making bankruptcy a more appealing option. Its effects are also only temporary, and your credit score can be rebuilt over time faster than you may realize.
- How can I get creditors to stop calling me? The moment you file for bankruptcy, debt collectors must stop all their harassing tactics. A bankruptcy lawyer can ensure they follow this policy, and can even get them to stop harassing you without having to file for bankruptcy.
Have more questions? Everybody’s financial situation is different — we can provide advice tailored to your unique needs during a reduced-rate initial consultation. Call our office at 512-487-7604 today, or reach out online to get started.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.