Getting harassed by bill collectors and collection agencies is a stressful experience. No one wants to be reminded of their inability to repay debts they owe. Eliminating debt can seem like climbing a never-ending mountain at times. Depending on the amount of debt, you can begin to question whether clearing your debt is even possible. The answer to that question is a resounding yes. If your total unsecured debt is more than half of your annual income, you should probably explore your options in declaring bankruptcy.
Benefits of Declaring Bankruptcy
Declaring bankruptcy can help you reduce or eliminate your debts while keeping certain property and assets like your home or vehicles. Declaring bankruptcy can also stop you from being harassed by aggressive bill collectors. The bankruptcy process can be a great solution to helping people get out from under a crushing amount of debt.
In addition to reducing the collection agencies’ unending efforts to recoup their money, other forms of collection actions like repossession, wage garnishment, foreclosure, and debt collection lawsuits are stopped when a person files for bankruptcy. Although there are a few categories of debt that cannot be wiped out through the bankruptcy process – like student loans and child support – most other debts like credit card debt, medical bills, and personal loans can be eliminated.
When to File for Bankruptcy
Declaring bankruptcy is a solution designed for individuals who have acquired an unmanageable amount of debt. Through bankruptcy, these individuals are able to have a fresh start by eliminating their debts and giving them a blank financial slate. Because bankruptcy is a complex process that will affect their credit, individuals are encouraged to exercise all of their options before filing for bankruptcy. After all debt relief options have been exhausted, declaring bankruptcy should be considered as a last resort.
How to Declare Bankruptcy
There are several legal required steps involved with the bankruptcy process. If you fail to complete every step, it can result in the dismissal of your case. The first step involves completing a credit counseling program and obtaining a certificate to file with your bankruptcy petition. The counselor will review your personal financial situation, offer advice and guidance on budgeting and debt management, and reveal any alternatives to bankruptcy.
The next step involves the submission of a bankruptcy petition and financial statements that show your assets, debts, and income. You will also submit a means test form, which determines whether your income is low enough to qualify for Chapter 7 or if you have to file for Chapter 13.
The 341 Meeting
Once you have filed, a bankruptcy trustee assigned to your case will arrange a meeting known as a 341 meeting. This meeting is an opportunity for the creditors to whom you owe money to ask specific questions about your financial situation and your plans to repay them. If you plan to file for Chapter 7 Bankruptcy, this is a mandatory meeting. The meeting is scheduled one month after a debtor files for bankruptcy. For the meeting to be considered legally valid, it must include both the individual who is filing for bankruptcy and the court-appointed bankruptcy trustee.
Contact a Bankruptcy Lawyer Today
At The Law Offices of Emil Fleysher, P.A., we are dedicated to diligently and compassionately helping clients resolve their debt problems and get a fresh start. Call us today at 888-886-0020 or submit our contact form online to schedule a free consultation.