Mounting debt is something no one wants to deal with, no matter their income bracket. When debt begins to grow, individuals often find it difficult to overcome. Knowing when to declare bankruptcy allows individuals to make pragmatic choices that will benefit their finances. If you are dealing with too much debt, you have the right to seek legal help.
What Are the Options for Bankruptcy?
There are two main types of bankruptcy for individuals and couples to file. The type of bankruptcy a person chooses depends on their debt amount, the types of debt, and their income. When deciding on bankruptcy, it helps to contact the office of attorney Dave Burns.
Chapter 7 is a type of bankruptcy that is handled quickly. In less than six months, this type of bankruptcy is typically over. After a person goes through means testing, they will learn if they are approved. A trustee is placed over the bankruptcy and is responsible for liquidating non-essential assets. Some assets are absolved, depending on the amount and type.
Individuals may also apply for Chapter 13 which is a bankruptcy for wage earners. Individuals must have some type of income coming in every month because they will need to make payments to pay off the debts they owe. Generally, individuals are given two to five years to pay off their debts. Chapter 13 can help homeowners prevent or stop foreclosure.
Is Bankruptcy Right for You?
Bankruptcy laws were put into place to make filing for bankruptcy accessible to citizens who genuinely cannot afford the debts they owe. No one should enter bankruptcy without careful thought and research. There are a few signs bankruptcy may be the answer for your debt.
- You are using savings to try to pay down debt.
- You are using credit cards to pay debts.
- Creditors are actively pursuing you
- You are in danger of losing a home.
- You are behind on many payments.
- You have stopped opening your mail or answering calls.
- You are spending your nights tossing and turning in worry.
Bankruptcy is a viable choice when used appropriately. Bankruptcy should never be used as a pre-planned way out for purchasing big ticket items and not paying for them.
When someone files for bankruptcy, their entire financial history over the last few years is carefully reviewed. If the bankruptcy judge feels fraud has occurred, the individual could find themselves in legal trouble.
Do You Need a Lawyer?
Many people wonder if they should hire a lawyer to help them with bankruptcy. Although it is certainly not a requirement, people often feel more comfortable knowing they are receiving legal guidance in the process.
Those who hire a lawyer will receive help with the paperwork which can be a little overwhelming due to the length and depth of the information. The lawyer will work to ensure everything is filed appropriately with the courts.
Bankruptcy does not have to be a stressful pursuit. Bankruptcy is an option that allows people to legally overcome the debts they owe so they can start a new financial future. Whether a person chooses Chapter 7 or 13, both offer help to ensure debts are properly hand