Filing for bankruptcy may be viewed as unfavorable, but it is actually an opportunity to give people a fresh start, free from certain debts.
Debt is an unfortunate situation that many of us will find ourselves in from time to time. Therefore, it is important to know the basics about bankruptcy should you need to apply for it, and it is not as complicated as we may perceive the process to be.
So let’s go over the the most important facts you should know about bankruptcy!
What is Bankruptcy?
Bankruptcy is a legal process that helps individuals or businesses who cannot pay off their debts and obligations. The debtors can liquidate their assets to pay off their debts or they could establish a repayment plan.
Bankruptcy can discharge debts such as medical bills, credit cards, utility and phone bills.
The process begins when a debtor files a petition to the bankruptcy court, and cases are handled in federal courts.
Those who apply for bankruptcy will be appointed a licensed attorney who will familiarize themselves with the specifics of their case to determine what the best steps are for them. They will also protect the debtor’s assets from being seized by creditors to the best of their ability.
What type of bankruptcy is best for you?
There are several different types of bankruptcy.
They are referred to by the chapter and have their own set of obligations that have to be met in order to apply.
Chapter 7 and Chapter 13 are for individuals who are applying for bankruptcy.
Both chapters:
- Erase credit card debt and personal loans
- Stops harassment from creditors
- Prevents lawsuits from happening
However, there are some significant differences between the two. Chapter 7 has a quick turnaround, focuses on discharging unsecured debt, and sometimes requires you to give up some of your personal belongings. Chapter 13 has a three to five-year repayment plan, allows you to catch up on repaying secured debts such as your home or car, and does not require you to give up any personal items in the process.
Chapter 9 is best for municipalities including cities, towns, and school districts.
Chapter 9 of bankruptcy will:
- Provides protection from creditors
- Negotiates a plan for adjusting debts
- Reduces the amount of interest and eliminates debts by obtaining new loans.
Your attorney will discuss all of your options and help you settle on which chapter is best for you.
Find a bankruptcy lawyer
While you are able to file for bankruptcy on your own, you may require the help of a licensed bankruptcy attorney to guide you through the process since they are well-equipped and familiar with the entire ordeal.
At Todd Cushner & Associates, where Mr. Cushner is a highly qualified bankruptcy attorney himself, we have team members on board who are readily available to take on your case, protect your assets, and relieve you of your debt.
Contact us today for your free consultation and to get answers to any of your other bankruptcy-related concerns.
