Credit card companies may tell you that you’ll only go bankrupt if you lose control over your spending and misuse your credit card, but this is not true. Bankruptcy lawyers will tell you that their clients who have filed bankruptcy cases with bankruptcy courts have done so for various reasons.
Debtors come in all kinds. Nobody is completely safe from financial problems. Without you expecting and preparing for it, you could lose your job, close your business, be in an accident, go through divorce, or suffer an illness. Many people who file for bankruptcy end up in debt because of one of these unforeseen circumstances. To declare bankruptcy is often their last resort to get out of debt.
The Bankruptcy Act
Federal law provides bankruptcies as ways for businesses and individuals to have a fresh start by reducing or removing their debts. A bankruptcy petition usually leads to a bankruptcy discharge; however, not all debts are dischargeable. Certain debts, such as child support, cannot be discharged.
In declaring bankruptcy, check what your options are in the bankruptcy code. There are different types of bankruptcy you can file under. Personal bankruptcy filers, however, have two main bankruptcy chapter choices: 7 and 13. Chapter 7 is about liquidation, while Chapter 13 is about reorganization.
Chapter 7 or the “Big Eraser” is for those who want a quick bankruptcy discharge. You have to pass the means test to qualify for it. Meanwhile, a Chapter 13 bankruptcy case involves a forced repayment plan. Filers have to pay back their debts in exchange for a super discharge and the ability to keep their assets. Take note that Chapter 13 filers make payments based not on the amount they owe, but on what they can afford to pay.
The Bankruptcy Process
During bankruptcy proceedings, an automatic stay or stop comes into place. This is part of the bankruptcy protection that a debtor is after when he or she files for bankruptcy court protection. It requires creditors and collection agencies to stop their debt collection attempts. No creditor can continue efforts of a wage garnishment, tax levy, foreclosure, or any other form of collection when this is in effect.
There are different things to consider in petitioning for bankruptcy. For instance, if you’re filing for bankruptcy and you have a secured debt with pledged property collateral such as a car loan or a mortgage, you must continue to pay or you’ll have to turn it over as per court order. There are also bankruptcy exemptions to think of. These differ from state to state, along with bankruptcy laws, so it’s important to consult a Portland lawyer specializing in local bankruptcy law.
For Help in Bankruptcy Filings, Contact a Portland Bankruptcy Attorney Today!
If you’re considering bankruptcy, talk to a bankruptcy lawyer to get not only correct bankruptcy information, but legal advice and assistance as well. You can use the help from the time before filing when you’re filling out bankruptcy forms up to the time after bankruptcy when you’re starting anew. It’s good to have legal counsel from one of the state’s bankruptcy lawyers all throughout this financial journey.
A bankruptcy filing may just be the solution to wipe out your debt. To find out what your next step should be, call us at Northwest Debt Relief Law Firm and speak with one of our experienced Portland bankruptcy attorneys.