If you are struggling with debt that you cannot repay, you should look closely into filing bankruptcy. Financial problems and debts are often caused by sudden unemployment, divorce, or emergency medical expenses that you have to pay off. If you are tired of receiving unending creditor notices and calls from individual debt collectors, collection agencies, or credit card companies, consult with reliable bankruptcy attorneys. Aside from helping you understand the essentials of bankruptcy law, they can explain to you how to rebuild and have a fresh start through the bankruptcy process. Good bankruptcy lawyers will work closely with you and help you throughout the entire journey: from learning how to file bankruptcy forms all the way to discharge.
There are different types of bankruptcy. Your assets, and liabilities, types of debt, and future plans will factor into the specific bankruptcy case that you will choose. Filing a petition in bankruptcy will help you resolve most of your debt problems, such as credit card bills, medical bills, and certain tax debt.
There are two common types of personal bankruptcy. Chapter 7 or the liquidation bankruptcy and Chapter or the reorganization bankruptcy. Your bankruptcy attorney can explain the specifics of each. Once your bankruptcy petition is approved by the bankruptcy court, an automatic stay shall be effective immediately. Such bankruptcy protection will prohibit any collection activities by the creditors.
Filing Chapter 7 Bankruptcy
Chapter 7 bankruptcy proceeding is a debt elimination plan. It usually takes 90 days to successfully complete this bankruptcy procedure from filing a petition for bankruptcy to a discharged debt. Here, your nonexempt assets will be liquidated, with the list of exemptions varying from state to state.
To be eligible for filing Bankruptcy Chapter 7, you must pass what is called a bankruptcy means test. This will look into your monthly income and total living expenses. The means test will compare your income with the state median income and determine your eligibility as set by bankruptcy rules.
Filing for Bankruptcy under Chapter 13
If a debtor does not qualify to file for Bankruptcy Chapter 7, another option is to pay back your debts through a Chapter 13 repayment plan. Restructuring your debts will help stop foreclosure and wage garnishment while you make monthly payments to creditors. Essentially, after filing Bankruptcy Chapter 13, you will be able to keep your assets while having sufficient time to repay what is owed.
When you file bankruptcy under Chapter 13, you reorganize your finances and propose a payment plan that will allow you to pay all your debts. If you are considering Bankruptcy Chapter 13, note that your debt-repayment plan usually takes three to five years. After which, your unsecured debt may be discharged.
Bankruptcies will protect you from harassment and lawsuits. Consult with a bankruptcy lawyer as soon as you can. They will help you with debt management and in understanding relevant bankruptcy laws. Contact us at the Northwest Debt Relief Law Firm for legal help regarding bankruptcy cases.