Posted on: 17 April 2023
In the year 2022, 387,721 households filed for bankruptcy. While down from the previous years due to federal assistance after the recent pandemic, bankruptcies are expected to increase as the benefits end. If you suspect that bankruptcy can end the threatening correspondences from financial institutions and restore your financial health, you should enlist the services of a bankruptcy lawyer to help you through the process. Learn more about how a bankruptcy lawyer can help you through your bankruptcy.
Bankruptcy will forgive credit card debt, medical debt, and most other debts. However, bankruptcy does not forgive federal student loans, child support, alimony, or tax debts. Your bankruptcy lawyer will examine your financial situation to help determine if you're a viable candidate for bankruptcy.
Choose the Appropriate Type of Personal Bankruptcy
There are two primary options you can choose when filing for personal bankruptcy: Chapter 7 and Chapter 11.
Chapter 7 bankruptcy resolves debts quickly by selling all of your assets and then using the funds to settle a majority of your debts, resolving the issue in a matter of weeks or months. If you don't have a reliable income, this may be the only option available to you. Unfortunately, you may need to sell your home in order to settle your debts. Furthermore, cosigners are still on the hook for the unsettled debt.
Chapter 11 bankruptcy establishes a repayment plan over a few years. You can keep your home and protect cosigners, but the issue won't be resolved until you finish the repayment plan. This is not the best option if you need an immediate resolution.
Legal paperwork gets complicated. Bankruptcy can take longer than necessary if you fail to file the required documentation or make an error that must get corrected. A bankruptcy lawyer will complete the paperwork right the first time. You get a piece of mind and the reassurance that your lawyer will keep you updated regarding pending agreements. Your lawyer will also know the best way to answer questions to put you in the most advantageous position while keeping you legally safe.
You may have questions during and after the initial bankruptcy filing. Your bankruptcy lawyer can answer your questions for you. You can trust their answers based on their legal training and experience. You'll get far better advice compared to internet research. Your bankruptcy lawyer may also be able to provide you with resources that will prevent you from falling into debt again.Share