If you’re not able to deal with your debts anymore and thinking about filing for bankruptcy, you should think again. Bankruptcy is not a scary thing, but it will definitely have some negative consequences. That is why it should be your last resort. You must understand and study bankruptcy completely before you file for it. It is a complicated and expensive procedure, so it is vital to ponder long before taking this decision. Nevertheless, if you comprehend some chief characteristics of bankruptcy, you will feel more prepared and less afraid of taking this step.
1. Always provide accurate and complete information
Some people file for bankruptcy only because they want to get rid of the debt as soon as possible and as a result, they provide inaccurate and dishonest information. This fraudulent act can result in severe penalties. Only an honest debtor is eligible to file for bankruptcy and get debt discharge. It means that you have to provide all of the information related to your property, expenses, income, creditors, and debts. If there is a misrepresentation of information such as if you fail to disclose all your properties, you will face harsh consequences because dishonesty in bankruptcy is a crime.
2. It will expose your financial life to public scrutiny
If you file for bankruptcy, your entire financial life, income, expenses, mistakes and everything will be opened to the public. If you feel uncomfortable discussing your personal or financial life even with family and friends, you need to prepare a lot for it. During the process of bankruptcy, you will be required to be present at the meeting of creditors. In this session, you will have to answer questions in a public room.
This process can be intolerable and humiliating for some people because you have to answer a lot of questions related to your financial life in front of many people. Prepare yourself completely for all types of questions and provide accurate information so that you can be confident and less embarrassed during the meeting.
3. Filing for bankruptcy is not inexpensive
Filing for bankruptcy is not at all cheap and can cost you a considerable amount of money. No matter if you are entirely broke or just unable to pay off your debt, you will have to pay the bankruptcy fees if you want to file for it. Whether you are preparing and filing your case or hiring an attorney for it, you will have to pay a hefty sum of money. However, you can find relief by petitioning the court for a fee waiver.
4. Discharge from bankruptcy can take a year or more
It all depends on your income and how many times you have filed for bankruptcy. If this is your first time and you are below the government’s income limit, you will be eligible to be discharged in less than a year. If your income is more than the government’s income limit and it’s the second time you have filed for bankruptcy, it might take more than a year or two.