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Important facts about Chapter 7 bankruptcy

There are a lot of misconceptions and false information floating around about Chapter 7 bankruptcy. Because some of this false information is so common, it's understandable that many people seeking bankruptcy will initially believe it. If you're really serious about using bankruptcy as a process to get back on track, keep reading. You might need to educate yourself about common myths.

Bankruptcy isn't a quick fix. Although Chapter 7 is the fastest form of debt resolution, the process will still take time to prepare, and then it will take approximately four to six months to bring to conclusion. In addition, one's bankruptcy history will linger for years. Although the person will be better off financially, his or her credit can take time to recover.

Your finances will become public. After filing for bankruptcy, your financial situation will become part of the public record. For those with privacy concerns, this can be a deal breaker. Some people would rather not expose their financial situation to the public at any cost.

Complete honesty is necessary. Bankruptcy courts are experts at sniffing out lies and untoward behavior. If you get caught in any kind of lie during bankruptcy, your bankruptcy process could become nullified, and it could trigger an FBI investigation.

Bankruptcy only applies to you. Imagine that you have a cosigner on your debt. If you file for bankruptcy, you can get out of your debt obligations, but your cosigner will still be responsible.

If you're aware of the above information and you're still ready to file for Chapter 7 bankruptcy, then the process might indeed be for you. Make sure you continue learning more about bankruptcy law to have a better idea of what to expect.

Source: The Balance, "Top Things to Know About Bankruptcy," David Haynes, accessed Feb. 16, 2018

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