Most people file bankruptcy in order to solve their debt problems. As a result, the legal effects of bankruptcy are often seen as less important than potential financial relief.
Nevertheless, bankruptcy does have some long-lasting legal effects. Bankruptcy may affect property rights, home or car ownership, and the legal nature of debts held by more than one person.
Bankruptcy has a broad range of legal effects depending on each person's unique circumstances, so not every single effect will be listed here. However, there are a few key areas in which bankruptcy may have an effect on a filer's legal rights. These include:
Beyond these impacts, bankruptcy does not usually affect any fundamental rights of a filer, such as the ability to vote, pursue new loans, and other basic rights.
Due to the many differences between state bankruptcy laws, the legal effects of bankruptcy may have some variation by state.
For example, the types of property which are exempt from bankruptcy, and the value up to which may be protected by creditors, are determined by each state.
As a result of these differences, many people who file bankruptcy consult with attorneys in their area before making key decisions.
For more information on your local laws, contact a local bankruptcy lawyer today.