For individuals there are two types of personal bankruptcy including Chapter 7 in which all of their debts are essentially eliminated and Chapter 13, in which their debts are paid off over a 5 year period of time, supervised by a trustee from your court.

A quick consultation with a bankruptcy attorney will help determine which of the types of bankruptcy the individual qualifies to file under. There are certain tests administered to determine if the individual qualifies to file Chapter 7 under the new bankruptcy laws.

Many people think that just by declaring bankruptcy, their financial slates are wiped clean. That is simply not true. Most debtors have to cough up at least a portion of their debts, and the courts may force you to sell assets to do that. You will find that is will be very hard to obtain credit for years. You will have the bankruptcy record showing up on your credit score for at least seven to ten years.

Will I be able to get credit after bankruptcy? – Another common perception about bankruptcy is that if you file you won’t qualify for credit again, but you can in fact get a credit card or loan after bankruptcy. It is often recommended in order to start building a history of positive credit again. There are options in which you could use a prepaid credit card, that only allows you to spend what you deposit in your account so there’s no way to over charge. You also can get a regular credit card, but more than likely it’ll be from a sub-prime lender who will almost always impose a much higher interest rate on your card. So it’s an option but just remember that it will cost you more.

Bankruptcy is a private matter – Actually no, bankruptcy is very much public record, and anyone wanting to find out if you have filed for bankruptcy, can find out. The courts really make this easy through a program called Pacer (http://pacer.psc.uscourts.gov/), which allows pretty much anyone to access court records for a fee. This is how you’ll often end up getting offers from local car dealers. They know that in bankruptcy cases people often liquidate assets to repay creditors, so they’re betting you had to surrender your vehicle and are in need of transportation. Often you may hear them say that they don’t care about your bad credit, but be careful with those sub-prime rates you are likely to get if you have to finance the purchase. You’ll also get lots of offers from law firms and agencies that “specialize” in credit repair after bankruptcy. This one you must consider carefully because credit repair does not apply to everyone.

If you have done your research into all of your options and have got a good personal bankruptcy attorney or lawyer on your side, you should be able to deal with this difficult time in your life efficiently and can start to get on your way to financial success once more.

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