Know Your Bankruptcy Options

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Struggling to pay debts can be consuming. If a debtor has found themselves in over their heads, at times, it may be nearly impossible to climb out from under it without assistance. The stakes can be high for someone who is unable to make payments towards their financial obligations. Not only might a debtor stand to face constant calls from creditors, they may even take legal action against them to obtain the debts they owe. A bankruptcy attorney may be wise for someone considering filing for bankruptcy. Not only may they help educate you regarding your options, they can help in partnering with you through the process.

Bankruptcy Options

Bankruptcy can be a complicated process, primarily because there can be variations from state to state. Bankruptcy can provide debtors with tremendous relief from the stressors of their financial situation. When filing for bankruptcy, there are two primary chapters a debtor may choose from. Depending on your situation, you may choose from either Chapter 7 or Chapter 13. Each has different advantages based on the debtor’s financial situation.

Chapter 7

Chapter 7 is often a full liquidation. The idea behind the process is to allow the debtor to start with a clean slate. Through bankruptcy court, a trustee will be assigned to oversee your case. They will review your assets and financial obligations. Their job is to distribute your assets to your creditors to resolve as much debt as possible. The following include some of the advantages and disadvantages:

 

  • Advantages

 

    • Fast resolution (generally 3-5 months)
    • Automatic Stay
    • You may still be able to obtain credit after
    • The ability to eliminate most debts

 

  • Disadvantages

 

    • The risk of losing property
    • The bankruptcy will remain on your credit report for 7-10 years
    • In order to meet eligibility you must pass a means test. Meaning your income will need to be below a certain amount.
    • You will still be required to uphold certain financial obligations such as child support, alimony and student loan debt

Chapter 13

Chapter 13 bankruptcy gives debtors the ability to formulate a repayment plan with their attorney and pay it off over a period of time. This is often the most viable option for someone who draws a regular income or does not meet eligibility for Chapter 7.

 

  • Advantages

 

    • Protect your home from foreclosure by giving you the ability to make up for past payments over time.
    • Usually on your credit report for 7 years
    • Less significant impact on your credit

 

  • Disadvantages

 

    • The process can take longer before your bankruptcy is resolved. In some cases you could be paying your debts for up to 5 years.
    • Your credit will be impacted
    • You will still be required to uphold certain financial obligations such as child support, alimony and student loan debt

The laws governing bankruptcy can vary depending on the state you reside. Because of this, the help of an attorney may be advisable when navigating the legal process. They will know the ins and outs that may prove indispensable when facing a bankruptcy. Filing pro se, or without the assistance of an attorney may be tempting. However, by doing so a debtor may be left feeling more overwhelmed by the process than they should.

Bankruptcy Attorneys Help for a Smoother Process

Because bankruptcy laws are different depending on where you live, the process can become confusing. It can be difficult to determine how best to approach your financial situation. Bankruptcy attorneys have experience in the procedures surrounding the bankruptcy process. Bankruptcy attorneys can support a smoother process by:

  • Reviewing your case and determining if bankruptcy is right for you
  • Educate you surrounding the process
  • Help in determining which bankruptcy process is right for you
  • Ensure that the correct forms are filed in a timely manner
  • Help determine your exemptions

When faced with so many unknowns, why would a debtor want to manage the stressors of their own bankruptcy? Attorneys can prove invaluable in the services and support they provide to their clients.

Having a clear understanding of bankruptcy options available to you can play a key role in your decision making. With a bankruptcy attorney, not only may they provide insight and education into each option, they can also help you determine which one may work best based on your situation. Contact a debt collection lawyer Tampa, FL relies on for assistance should you choose to pursue the bankruptcy process to alleviate your debts.

 

 


 

Thank you to our friends and contributors at The Law Office of Michael A. Ziegler Law, P.L. for their insight into bankruptcy and your options.

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