Debt and bankruptcy are terms that often bring up negative feelings. However, the main goal of filing for bankruptcy is to give people in debt a fresh financial slate. You may find yourself in a place where your debts have become too much for you and you can no longer afford to pay. This happens to a lot of people for many different reasons like overwhelming medical bills or unexpectedly losing their job. When you file for bankruptcy, you will be able to have most of your debts eliminated and creditors will no longer be able to take any legal action against you. It is important to understand the different bankruptcy chapters.
Keep in mind that when you file for bankruptcy, you will see a negative impact on your credit score, but it will start to improve once the bankruptcy has come to an end. A seasoned attorney can help you file for bankruptcy and take back control of your finances. Let’s take a look at a few types of bankruptcy that may be the solution to your financial problems.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy essentially allows an individual or a business to give up certain assets and walk away from debts. As an individual, your income must be less than the court-established income and you must have little to no assets in order to qualify. The courts will basically liquidate any unexempt assets in an attempt to recoup some of your debt. However, if the bankruptcy filing is approved and you have no assets to sell off, the debt is discharged. When a debt is discharged, you will no longer be held liable for that debt. This is a great option for people who simply cannot make regular payments.
Chapter 13 Bankruptcy
This type of bankruptcy chapter is for individuals who want to restructure their debt loads. We will negotiate with creditors for partial repayment or establish a plan to pay back in full with interest. This payment period can last between three to five years. Many times, debtors only end up paying a percentage of what the debt was originally. To qualify for this type of bankruptcy, you should have a regular income and your unsecured and secured debts must be within the threshold requirements. One key benefit of filing for Chapter 13 is that it could save your home from foreclosure.
Other Types of Bankruptcy Chapters
There are several other different types of bankruptcy chapters that are meant for specific groups or entities. Chapter 9 Bankruptcy is meant for municipalities such as school districts or villages. However, Chapter 11 is another option for businesses to restructure debts. Chapter 12 is geared toward fishermen and family farmers.
Are There Other Options if I Have Too Much Debt?
You have options if you have too much debt. One of those options is filing for bankruptcy, which we’ve covered above and can be done with the help of a skilled bankruptcy attorney. Another option is to try negotiating with creditors. In this case, most creditors would get some of their money back compared to nothing at all. You can see if they want to work with you and your current financial situation. They may offer a debt resolution or payment plan that works for you. You may also want to try credit counseling with the help of an agency. They can help create a debt management plan and even work with creditors to find a solution that works for both parties.
Schedule an Appointment Today with The Law Offices Of Emil Fleysher for Help Decoding Bankruptcy Chapters
When you are considering filing for bankruptcy, do not try to do it alone. The Law Offices of Emil Fleysehr, P.A. has the experience and the knowledge to help you navigate this stressful situation. It can be scary to see your credit score change, but we will get you through it. Typically, our clients will begin to see an increase in their credit score when they have two to three accounts in good standing. We have been able to help a majority of our clients reach credit scores of over 700 within a year after finalizing their bankruptcy. If you need to discharge your debts by filing one of the bankruptcy chapters available, contact The Law offices of Emil Fleysehr, P.A., at 888-886-0020 for a free consultation.