Bankruptcy may be able to offer consumers who are battling with debt just the lifeline they need to get their financial situations under control. It can be a tremendous help for individuals who recently lost a job, are experiencing a medical illness or have experienced other adverse factors affecting their source of income.
It’s often a good idea to resolve debt issues before the situation becomes dire since late fees can stockpile, credit scores can become damaged and it can feel like an impossible hole to climb out of. Luckily, bankruptcy assistance may provide significant debt relief, peace of mind and stop the unbearable collection calls.
How Can Chapter 7 or Chapter 13 Help?
Bankruptcy may be able to help in a number of ways including but not limited to:
- It may be able to release debtors from some or all of their debt obligations with a “discharge of debts.”
- It may be able to help with foreclosure prevention.
- It may be able to help you keep your vehicle.
- It may be able to stop certain wage garnishments and/or debt collection harassment.
- It may be able to get your utilities turned on after a disconnection of service.
Types of Bankruptcy
Bankruptcy includes a number of different chapters that may be filed depending upon the specific situation. The chapters include: chapter 7, chapter 9, chapter 11, chapter 12, chapter 13 and chapter 15.
Chapter 7 Bankruptcy & Chapter 13 Bankruptcy
The most common filing types by individuals are chapter 7 and chapter 13. Chapter 7 is the type of bankruptcy that may be able to discharge individuals from debt obligations since it is commonly known as the “liquidation” type of bankruptcy. Chapter 13 may be able to help individuals restructure their debts to make paying them more affordable since it is commonly known as the “reorganization” type of bankruptcy.
Individuals who are considering filing, but aren’t quite sure which chapter to file under should speak with an experienced bankruptcy attorney.
When to File Bankruptcy
Knowing when to file bankruptcy may benefit financially distressed individuals and homeowners tremendously. When dealing with tough financial situations, it can be extremely difficult recognizing at what point to reach out for additional help. Homeowners facing foreclosure should be especially cautious of when to file bankruptcy, since they may need to file bankruptcy at a specific time in order to avoid foreclosure.
Determining When To File Bankruptcy
To determine when to file bankruptcy, homeowners and individuals facing financial hardship should consider taking a close examination of their current state of finances. When dealing with difficult economic situations, homeowners and individuals may wish to consider bankruptcy as a viable option when they are experiencing two or more of the following:
- You have taken a serious reduction in income for an extended period time, likely in the form of job loss.
- You have significant outstanding debt on credit cards and are only able to make the minimum payment every month.
- Debt collectors call you regularly.
- You have been using credit cards to pay for necessities like gas, food and utility bills.
- You are not currently sure of all outstanding debt you have.
- You have significant medical bills and/or medical illness.
- Lawsuits have been filed against you for delinquent bills.
- You have missed mortgage payments and may be facing foreclosure.
What is the Cost of Bankruptcy?
The cost of bankruptcy is not frequently an exact number and can be affected by a number of factors. Costs of bankruptcy vary based upon the chosen bankruptcy filing, the duration of the bankruptcy, legal fees and more. Individuals considering filing for bankruptcy should consider the factors that can affect the overall cost of bankruptcy in order have the best opportunity at minimizing these costs.
3 Factors That May Affect Total Cost of Bankruptcy:
- 1. What chapter of bankruptcy is filed?
The cost for a chapter 7 bankruptcy can vary greatly from the cost of a chapter 13 bankruptcy. A chapter 7 bankruptcy is a type of liquidation bankruptcy and may be able to discharge more debts than a chapter 13 bankruptcy. Alternatively, a chapter 13 bankruptcy is a type of reorganization bankruptcy and individuals may be able to keep more possessions like a home or vehicle through this chapter of bankruptcy. Individuals are often advised to speak with a bankruptcy attorney prior to deciding on the chapter of bankruptcy to file.
- 2. How long will the bankruptcy filing take?
The duration for a bankruptcy can vary based upon the complexity of the case and the chosen bankruptcy filing. chapter 7 bankruptcies may be processed faster and individuals may be finished with their bankruptcy proceedings in less than year. Conversely, reorganization plans associated with a chapter 13 bankruptcy can take 3-5 years.
- 3. How much will an individual spend on legal fees?
Individuals are often surprised to learn that no attorneys are required when filing for bankruptcy. While this is an option, it is commonly not advised to pursue bankruptcy with the advice of a bankruptcy expert or bankruptcy attorney. Bankruptcy attorneys may be able to help expedite the bankruptcy process and minimize the total costs of a bankruptcy through effective exemptions.
Contact Bankruptcy Lawyers
The AmeriTrust Law Group employs lawyers that can work on bankruptcy cases with over 30 years’ combined experience. The bankruptcy and foreclosure defense teams at the AmeriTrust Law Group are staffed with case managers, investigators and paralegals.
For a free bankruptcy evaluation fill out the contact form to the right to speak with our professionals today.
Other Bankruptcy Articles
For more information related to bankruptcy, review The AmeriTrust Law Group’s bankruptcy articles.
The following information does not constitute legal advice and is provided for informational purposes only