Sometimes when financial struggles are insurmountable, the only solution is to file for bankruptcy. Bankruptcy is an opportunity to clear the slate and get legal assistance for a fresh financial start. Sometimes settling debts outside of bankruptcy is an option, however there are many questionable “debt settlement” companies out there. These companies require up front “fee” payments which are non-refundable, even if they fail to reach settlement with your creditors. An experienced bankruptcy attorney will have credibility when informing your creditors that if a settlement cannot be reached, a bankruptcy notice will be forthcoming. Many bankruptcy attorneys will try non-bankruptcy debt settlement before filing a bankruptcy case on your behalf. Acquiring a competent bankruptcy legal service will help you assess when debt settlement might be an option and inform you as to what steps are necessary to file.
Chapter 7 Bankruptcy is the most common form of bankruptcy. It is a liquidation proceeding in which the debtor’s non-exempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors. Individual debtors typically get a discharge within 4-6 months of filing the case. Assets that are non-exempt are taken over by the trustee, who sells them and pays creditors as much as the proceeds permit. Any wages the debtor earns after the case is begun are the debtor’s, and the creditors have no claim on those earnings. A bankruptcy attorney can advise you regarding which of your assets will be exempt from liquidation, and what you can expect for the future. Chapter 13 is a repayment plan for individuals with regular income, unsecured debt less than $336,900, and secured debt less than $1,010,650. The debtor keeps his property and makes regular payments to the Chapter 13 trustee out of their future income to pay off their creditors over time (typically 3-5 years). Repayment in Chapter 13 can range from 1% to 100% depending on the debtor’s income and the type of the debt. Chapter 13 also provides a way for bankrupt individuals to avoid foreclosures and repossessions. In certain circumstances, debtors can reduce the balance of loans on vehicles and discharge second mortgages or home equity lines of credit. It is not recommended that you file bankruptcy without the assistance of an attorney, as the bankruptcy process is complex. Based on the factual and legal complexity of your case, a qualified bankruptcy attorney will be able to offer you a customized solution to your situation.