Filing for bankruptcy is an attractive option for debtors who Bankruptcy Law Network. Financial problems are not just the result of poor financing decisions. Sometimes, being deep in debt came as a result of a serious illness in the family, losing a job, or facing other unexpected circumstances that crippled you financially.
But you don’t have to live with your burden for long. Debt relief is one of the best gifts you can get from bankruptcy programs offered by several law firms such as Bankruptcy Law Network. Below are several pieces of information to get you started with filing bankruptcy.
Individuals in the same situation as you, or those considered minimum wage earners, will usually file the most common among all types of bankruptcies, a Chapter 7 bankruptcy. Filing under this type shall wipe out almost all of the unpaid medical bills, credit card balance, and even outstanding personal loans. In a Chapter 7 filing, if your debt is secured with collateral, you have the option of having it reaffirmed (by giving payments so as to keep the collateral), or disaffirmed (by giving back the creditor’s security interest). This would apply to debts like a car loan or home mortgage.
If you want to keep your house or car and still have other debts discharged, then this is possible, provided that you pay regular monthly installments to your lienholder. However, as per bankruptcy laws, you will first need to pass a means test before being an eligible filer.
Another option for individuals who face huge amounts of debt is Chapter 13 bankruptcy. If you file for bankruptcy protection under this type, you will be given an extended period of time, as well as new terms, to pay off loans. This is all possible through a repayment plan which is a new agreement between a debtor and a creditor. Usually, the time extension is between 36 to 60 months.
If you plan to choose this type of bankruptcy, then you must ensure that you have enough disposable income or will generate earnings in the future, sufficient to cover most of your loans. While it appears that a Chapter 7 may be the best option for you, Chapter 13 provides a special way of addressing the burden of financial problems as you are given a longer time to pay nonexempt debts such as student loans. Moreover, if you have unpaid income taxes, you are still liable to repay the full amount under Chapter 7, while in Chapter 13 you may craft a payment plan for giving monthly installments within five years.
Before deciding on which of the different types of bankruptcy you will petition in court, try asking yourself with the following questions first:
Being harassed means constantly feeling threatened by repetitive calls and demands from creditors. Filing personal bankruptcy will put a stop on your lenders’ collection activities after issuance of an automatic stay, which is a court order.
Bankruptcy gives you a fresh start, but you need to accept some trade-offs. This includes having your valuable assets placed in a bankruptcy estate to be sold off by a trustee as payment for your loan obligation. The good news is that under state and federal law, there are certain items that are exempted from being seized by creditors. You may request the full list from any bankruptcy lawyer.
It most certainly will and you need to accept this. But remember, rebuilding credit score by earning it through timely payments in future obligations, opening a savings account, or using a secured credit card.
In bankruptcy filings, the first time a petitioner stands in court is during your meeting with creditors where you will be asked about your financial capacity to pay, other debts, or property. This is normally the only time you have to appear in court and you will have a month to prepare for this after filing bankruptcy.
You are not the only one considering bankruptcy. In fact, over a million bankruptcy petitions are filed in courts across the country. Although there is no one best bankruptcy type for everyone, there most certainly is one bankruptcy option that best fits your needs and a partner in bankruptcy who can help you find the right fit.
By seeking legal help in your financial situation, you can get the best knowledge on state laws and bankruptcy processes to arrive at the best possible outcome. You can get this knowledge from bankruptcy lawyers, who may also help you plan ahead for financial success by deciding the best type of bankruptcy filing. Make sure to hire a local attorney who has previously worked with clients who have a similar history as you.
If you need help from a bankruptcy attorney, contact us at Bankruptcy Law Network for a free consultation.
