What is Bankruptcy & Who is it Available For?
Bankruptcy is a helpful tool that allows an individual or family, with substantial debt, to get out from under it while protecting against wage garnishment, harassing creditors, and other issues associated with debt. If you have suffered a medical emergency, divorce, job loss or are just feeling overwhelmed by your debt, then bankruptcy may be an option for you.
Typically, bankruptcy falls into one of two cases, Chapter 7, commonly referred to liquidation and Chapter 13, commonly known as a repayment plan. Chapter 7 bankruptcy is a process where all qualifying debt is wiped away, in exchange, if there is any unexempt property, the Trustee may sell it and use it to pay your creditors. The vast majority of the time, a person is able to keep all of their property. A typical Chapter 7 on average take four to five months, and at the end all qualifying debt will be eliminated.
Under a Chapter 13, a steady income is required to fund the Plan, and because of this you are required to repay a certain percentage of your debts, over a three to five-year period. A Chapter 13 is typically appropriate for individuals who are behind on car or mortgage payments, owe back taxes, have filed for bankruptcy within the past few years, or unable to file a Chapter 7.
What are the Benefits of Bankruptcy?
There are many benefits to bankruptcy, first and foremost, it gives you and your family the peace of mind that there is a way out of debt. Second, by filing for bankruptcy you are able to stop numerous negative consequences of debt such as: wage garnishments, utility disconnections, foreclosure, collection actions, harassing calls from creditors, and repossession. Also, bankruptcy allows you to obtain a fresh start, so you can get back on your feet without being burdened by debt.
Important Considerations When Filing for Bankruptcy
Before filing bankruptcy, a person needs to be aware that there may be consequences for filing for bankruptcy. A few considerations are, whether you are looking to purchase a home within the next couple years, have pending lawsuits that may result in a large settlement in your favor, or on-going medical treatment. Each person’s situation is unique and to better understand how a bankruptcy would affect your situation, please do not hesitate to contact our office to discuss your case.
What Can a Lawyer Do for You?
An attorney can ensure that you are filing for the correct Chapter of bankruptcy, he or she can assist in preparing documents, counseling you on how to ensure your assets are protected and will not be sold by your Trustee. An attorney can also, ensure that all of the documents are in order so when your petition is filed with court the process with be smooth from beginning to end. Similarly, a large percentage of individuals, who file for bankruptcy by themselves, do not end up receiving their discharge or worse, will have the Trustee sell their property as their assets were not properly protected. Bankruptcy is a complicated area of law that if you do not have an attorney, who can help guide you through the process, you may be exposed to both substantial civil and criminal penalties.
Contact Petit & Dommershausen, SC., today to review your options.