Before filing for bankruptcy, the person should consider numerous important aspects of the situation. A Chapter 7 Bankruptcy Attorney in Tacoma WA can assist with the decision-making process, provide the necessary information, and file documents with the court. People typically have some misconceptions about taking this step, so having a lawyer is important for making sure they understand all the essential facts.
Joint Account Holders
If any of the debts have another person as a joint account holder, that individual will be held fully responsible for any amount left unpaid after a bankruptcy filing. This might be an ex-spouse or a relative who co-signed a loan. Many people assume that bankruptcy wipes out the debt, but the creditors have the right to pursue payment from any other person listed on the account.
Impact on Credit Score
People tend to worry a lot about how filing for Chapter 7 will affect their credit. They must realize that, by the time they are ready to hire a Chapter 7 Bankruptcy Attorney in Tacoma WA, their credit score likely is in the poor range because of many late payments. Filing for bankruptcy may have little effect on the score. It’s possible to begin improving that rating relatively quickly through techniques such as secured credit cards and loans.
Income Considerations
Many men and women don’t realize that their income must be low enough to qualify for Chapter 7. Otherwise, the court will assume they should be able to make payments on their debt. In that case, they may want to consider filing for Chapter 13 instead. That measure is a repayment plan. A lawyer such as Kevin G. Byrd assists with both of these types of filings.
Assets
Another misconception is that Chapter 7 always wipes the slate clear of outstanding debt. First, the person is required to dissolve any assets that are left that are not protected. For example, keeping one car of modest value is allowed, but a mutual fund valued at $3,000 will be sold to pay creditors. If the man or woman owns a house, the residence is protected too. However, the bank can still foreclose if the person is behind on mortgage payments.
