You did everything possible to avoid it. You created a budget. You cut back on spending. You sold a few possessions. You’ve stopped eating out and have even spent less money on food, eating rice and beans with every meal. You may have even sold your car. And even after all of this, you have come to the conclusion that you may need to file bankruptcy.
Bankruptcy can be a difficult and emotional process. It is a very serious decision, one that should never be taken lightly. But sometimes it truly is the best decision for you. Sure, bankruptcy can be confusing and emotionally taxing, but bankruptcy laws exist for a good reason: To help you when you need it the most. Bankruptcy is not an inherently bad thing; sometimes it can be the best way to get control of your financial life.
What Is Bankruptcy?
Bankruptcy is a legal process that involves you informing the court that you cannot pay your debts. After a review of your assets and liabilities, so long as you qualify, your debts can be eliminated. If they decide that you truly have no means to pay your debts, they will let you declare bankruptcy and eliminate your debts that qualify. Every bankruptcy case is unique, and the courts will decide the details of your bankruptcy case. They do have the power to require you to pay back certain debts.
The Two Main Kinds of Bankruptcy
Chapter 7 bankruptcy involves the court appointed trustee selling some of your assets if you have assets that can’t be protected. The remaining unpaid debt is erased with the exception of certain debts that don’t qualify. You can only file Chapter 7 bankruptcy if the court determines that your income is too low to realistically pay your debts. If the court deems you unable to file Chapter 7 bankruptcy, you still have the option to file Chapter 13 bankruptcy.
Chapter 13 bankruptcy means the court will approve a plan for you to repay some or all of your debts over the course of three to five years. You will have a monthly payment plan that you must follow. In this case, because you are paying some of your debt, you get to keep your assets unless you are paying for luxury items.
How I Can Help You
I have years of experience dealing with clients who needed to file bankruptcy. I have helped thousands of clients navigate the world of bankruptcy and determine an option that is best for them. If you are in financial trouble, call me today and I will work with you to determine how bankruptcy can help you. You can regain control of your financial life and find hope in the future.