If you have high credit card debt, overwhelming medical bills, forced home foreclosure and creditors calling and harassing you, you need help. Did you know that federal bankruptcy laws have been instituted to give you a fresh financial start? Did you know that filing Chapter 7 Bankruptcy may allow you to stop creditor calls and discharge certain types of unsecured debt? Did you know filing Chapter 13 Bankruptcy may allow you to stop a home foreclosure, stop harassing creditor collection actions and create a debt repayment plan to repay certain types of debt?
Finding the right Bankruptcy for You
So what type of bankruptcy can you file? Bankruptcy laws have made it more difficult for some debtors to simply discharge debt by filing Chapter 7 Bankruptcy, but some debtors may still have this option if they meet certain criteria (a median income below the state's median income level or by passing a means test).
Chapter 7 Bankruptcy is the simplest, quickest, least expensive and easiest way to discharge debt. It is available to individuals, married couples, corporations and partnerships, but is best for individuals who have limited income and wages and do not have many assets to protect from liquidation.
Under a Chapter 7 Bankruptcy, a court-appointed trustee will be assigned to identify the non-exempt assets which are part of your bankruptcy estate and will liquidate these assets to make debt payments to your creditors. Under some conditions, you may be able to retain secured property if new debt repayment terms can be negotiated with your creditors.
So what if you do not meet the criteria for filing for Chapter 7 Bankruptcy? You may find that Chapter 13 Bankruptcy is a good option. Filing Chapter 13 Bankruptcy can:
- Allow you to retain your assets
- Avoid home foreclosure
- Stop property repossessions
- Eliminate harassing creditor calls
- Allow you to repay a portion of your debts with restructured debt repayment terms
Chapter 13 Bankruptcy allows you to create a three to five year debt repayment plan. Trustees are assigned to your case to oversee the debt collection and the payment distribution to the appropriate creditors.
Debts not Discharged by Filing Bankruptcy
Not all of your debts will be discharged by filing either Chapter 7 or Chapter 13 Bankruptcy. Talk to a bankruptcy lawyer and evaluate your debt prior to making any decisions about filing bankruptcy. Common debts which are not discharged by filing bankruptcy can include:
- Child support payments
- Spousal support payments
- Debts incurred from embezzlement or fraud
- Personal debts for damages caused by a debtor who was driving while intoxicated
- Debts owed to certain tax advantage retirement plans
- Debts for malicious injury to property or another person
- Debts not outlined in the debt repayment plan
- Certain types of taxes
Hiring a Bankruptcy Lawyer
It may be possible for you to file your own bankruptcy if it is a simple case and you have no assets, but in most cases, you will need the assistance of a bankruptcy lawyer. Bankruptcy attorneys can provide honest, straightforward legal advice and determine what practical solutions are available to solve your financial problems.
Free initial consultations are generally provided by the bankruptcy lawyer to assess your assets, liabilities, number of dependents, income level, and all other relevant data to determine whether you can file Chapter 7 or Chapter 13 Bankruptcy.
For more information about bankruptcy in your state, please try these pages: