Bankruptcy
Bankruptcy
Struggling to pay one’s debts can be a stressful experience. Fortunately, options are often available.
Filing for bankruptcy may be one such option. When a person files for bankruptcy, they might liquidate their assets to repay debts, or enter into debt repayment programs. The basic purpose of bankruptcy is to provide someone with a fresh start so that they don’t continue to drown in debt they are unable to pay.
What Is Bankruptcy?
Bankruptcy is a legal process. Thus, anyone filing for bankruptcy should strongly consider enlisting the help of a bankruptcy attorney when doing so. A lawyer can help you better understand how to file for bankruptcy and can generally assist you in navigating all steps of the process.
Bankruptcy essentially allows a debtor who can’t pay their bills to seek debt relief. They may initiate the process by filing a petition in a bankruptcy court. Other steps the process might involve include:
- Gathering financial documents
- Participating in credit counseling
- Attending meeting with your creditors
- Participating in a course designed to help debtors avoid finding themselves in these circumstances in the future
What Happens When You File For Bankruptcy?
Creditors can no longer seek payment for debts when you successfully file for bankruptcy. Instead, a stay is put into effect. During this time, the court may assess your assets. These assets might be used to help pay off your debts, depending on the specific type of bankruptcy you have filed for.
Be aware that filing for bankruptcy is not without potential consequences you should consider. For example, when someone files for bankruptcy, typically, their credit score takes a significant hit. This might also limit their borrowing power for a period of time.
Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy
Bankruptcy comes in two common forms in the US: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Understanding the differences between the two before filing for bankruptcy is essential.
If you file for Chapter 7 bankruptcy, you may pay off your debts by liquidating your assets. However, if you have a home or other such property you may wish to hold onto, it might be better to file for Chapter 13 bankruptcy. This form of bankruptcy usually involves entering into a repayment plan with creditors.
Choosing what type of bankruptcy to file can be intimidating if you’ve never found yourself in this position before. This is another reason to consult with a bankruptcy attorney. They can explain your options and help you make the ideal choice for your goals and circumstances.
Speak With A Bankruptcy Attorney
Hiring a qualified bankruptcy attorney to guide you through this process can offer you substantial peace of mind during what might otherwise be a stressful time in your life. Although the prospect of filing for bankruptcy now might seem daunting, in the long run, completing the process with the assistance of an expert can allow you to resolve your financial issues and get back on your feet. To get started, fill out the Free Case Evaluation and get connected with an independent bankruptcy attorney today who subscribes to the website.
