Filing for bankruptcy isn’t for everyone who experiences debt. In fact, many people have some form of debt or missed payments, and when this is the case, you likely are not in the best position to file for bankruptcy. However, if you have missed mortgage payments, credit card payments, and other bills, debt collectors may begin calling you about getting their payments and they may even start filing lawsuits against you. When this happens, it can be incredibly overwhelming. Lawyers know just how stressful of a time it can be when you are deciding how to best handle your debt, and bankruptcy can be a great option for you. If you are considering this, please reach out to a law office today with any questions you might have and to set up your free consultation. Filing for bankruptcy does not have to be one more thing to add to your stress. Let an attorney help take this off your plate.
What exactly is bankruptcy?
Many people know that bankruptcy is the process of helping relieve some of your debt, but how does it work and when is it appropriate to file? When you file for bankruptcy, you are filing with a bankruptcy court. If they approve your application, this can give you extra time to determine the best solution for your debt problem and allow you to catch up on paying some of this debt back. In some instances—depending on which type of bankruptcy you file for—you can even get certain debts discharged. Individuals will typically need to choose between filing for Chapter 7 and Chapter 13 bankruptcy, and a business can file for Chapter 11 bankruptcy.
One of the greatest benefits of filing for bankruptcy is protection from the court. When they approve your bankruptcy application, they issue what is known as an “automatic stay.” When they do this, creditors will typically stop attempting to contact you about the debts you owe them. It is important to note that creditors may be able to get around this automatic stay if they petition the court to lift it.
How do I know which kind of bankruptcy is right for me?
Your attorney will help you by going over the details of each type of bankruptcy. For example, if you choose Chapter 7 bankruptcy, sometimes known as “liquidation” bankruptcy, you should be prepared to lose certain assets or property. This happens because you do not have the proper income to pay back your debts and the proceeds from the sale of your assets will help pay them off.
With Chapter 13, known as the “reorganization” bankruptcy, it allows you to set a schedule for paying off your debts over a certain period of time. This option is best for those who have a stable income and the ability to meet repayment schedules.
Filing for bankruptcy can lift a heavy burden off you, especially if you are facing large debts and even lawsuits. For more information on how an attorney can help you with your bankruptcy filing, please call a law office now.