If you’re facing financial or are close to bankruptcy, odds you’re feeling nervous and have a lot of questions.
Will my house and assets get taken?
What will happen if I file for bankruptcy?
How do I get myself out of this mess?
Bankruptcy is never easy on anyone, but fear not, because there’s plenty of resources available if you’re struggling to balance your books and facing bankruptcy.
For individuals, there are two types, Chapter 7 bankruptcy and Chapter 13 bankruptcy and it’s important to know the differences between the two.
Chapter 7 can be considered a traditional bankruptcy. Under Chapter 7, an individual must pay for or relinquish property for secured debts. Property that is non-exempt from Chapter 7 is surrendered to pay off debt. Exempt property is kept and can’t be seized to pay debts.
One other important thing about Chapter 7 bankruptcy is that it’s distinguished by the fact that individuals filing for it don’t have enough income to pay debts. Essentially, property is used to pay debts rather than money. Generally speaking, it takes about six months to complete.
With Chapter 13 bankruptcy, individuals aren’t seeking to remove all their debts. Instead, individuals file for it because they are trying to restructure payments to more manageable levels. They also do it if they are trying to remove a portion of their debt to better manage debts and find debt relief.
Under Chapter 13 bankruptcy, your payments and finances will be monitored by a trustee, who will make sure your creditors are getting the money they are owed.
Now that the outlines Chapter 7 and Chapter 13 bankruptcies have been established, let’s examine how a bankruptcy law firm can help you if you’re filing for bankruptcy or thinking about it.
- Experience: Trying to navigate a bankruptcy by yourself can be very complicated and a reputable bankruptcy law firm can be a big help. Bankruptcies often require a great deal of paperwork and documentation of your assets and liabilities. A bankruptcy law firm can help you with all of that because the firm’s lawyers know the filing requirements, the rules concerning paperwork and can ultimately make the whole thing a lot smoother.
- Legal representation: Bankruptcy can sometimes be an uncomfortable process for debtors, especially when it comes to dealing with creditors. A bankruptcy law firm can be there to handle communication with creditors and can negotiate and deal with settlers a lot easier than you can. Bottom line, if you’re going through a bankruptcy, you want legal representation in your corner and a good bankruptcy law firm can make you more comfortable about the whole process.
- Alternatives: If you’re experiencing financial troubles, filing for bankruptcy might not always be the best option. After all, there are many negative effects of bankruptcy:
- It can help you get out of debt, but not all debt is eliminated. If you debts like back taxes, child support and student loans, those will remain even after you file for bankruptcy.
- It stains your credit history for at least 10 years and it might be very difficult for you to secure a loan in the future.
- If you’re filing for Chapter 7 bankruptcy for example, you get to keep exempt property, but you do lose non-exempt property, which might include your home, bonds, cars, stocks and cash.
Instead of filing for bankruptcy, a bankruptcy law firm can point you toward alternatives. A bankruptcy attorney may suggest options like negotiating with creditors or seeking help from a credit counseling agency. A bankruptcy lawyer from bankruptcy a law firm might also suggest to you that you do absolutely nothing. If you’re in a situation where you’ve got little to no property or money and your situation isn’t changing, you can essentially become judgement proof: if you’re sued no one can collect from you because you have nothing they can take.
If you’re dealing with financial troubles, a bankruptcy attorney from a bankruptcy law firm can help provide you with answers to get out of debt and get your finances back on track.