Many people think they are good at handling money. They may let a few credit card payments build up here and there, but overall they keep track of what their expenses are. However, this is a very slippery slope, and once you start to let a few payments slide, this may add up to other monthly bills and your mortgage. Once debt piles up, you may have no other choice but to file for bankruptcy. When this is the case, an attorney can help you determine what kind of bankruptcy you should file for and which paperwork needs to be filled out. If you and your family are trapped in an overwhelming amount of debt, do not hesitate to reach out to a caring and respectful lawyer today. They want to help you regain control of your life.
What are the different types of bankruptcy?
There are typically two main types of bankruptcy that you will hear about and that most people will file for. These are:
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
Below, we will go more in-depth into what these types of bankruptcy are and help you understand which one you should file for.
Chapter 7 Bankruptcy
Typically, when someone files for chapter 7 bankruptcy, they will most widely associate it with a fresh start and new beginnings. This is because instead of creating new, monthly installments of debts—these debts could be medical bills or credit card debts—the debtor can have certain debts wiped completely clean. This saves them the hassle and the stress of a monthly repayment plan. One of the biggest catches with Chapter 7 bankruptcy, though, is that the bankruptcy trustee (the person who oversees this particular bankruptcy case) can sell some of the assets of the debtor and then distribute those proceeds to the creditors. When you speak with one of our attorneys, we can talk with you about what kind of asset you may need to sell and which assets you can keep.
It is also very important to note that just because you file for Chapter 7 bankruptcy does not mean that all of your debt will be completely wiped clean. In fact, there is some non-dischargeable debt that you will still need to pay off.
Chapter 13 Bankruptcy
When you file for Chapter 13 Bankruptcy, you must have some sort of reliable income so that you can begin repaying your debt. You can work with your attorney to discuss the details of your repayment plan, like what the minimum amount is you should be paying every month depending on how much you earn, what the value of your nonexempt property is, and how much debt you owe.
There are a few numbers that are important to keep in mind, and as of April 2019, you cannot have more than $419,275 in unsecured debt and no more than $1,257850 in secured debt.
Filing for bankruptcy can seem stressful and embarrassing, but attorneys understand that life can sometimes get in the way and you may miss payments. When this is the case, reach out to a trusted attorney today. They can help with your bankruptcy claim.