Email this page to a friendDeclaring Personal Bankruptcy
Declaring personal bankruptcy, either the Chapter 7 elimination of debt or the Chapter 13 repayment plan, is a way to find relief from debt and prevent further collection efforts by creditors. While each type of personal bankruptcy has its different advantages and disadvantages, both a Chapter 7 bankruptcy and a Chapter 13 bankruptcy will allow individuals to find amnesty from debt. The decision can be difficult. Most people don’t enjoy picking up the phone and calling the bankruptcy lawyer to discuss personal bankruptcy at first. But, once they’ve discussed their situation with a competent attorney, they can rest assured that they are making the best decision for their situation.
In a Chapter 7 personal bankruptcy, an individual can eliminate, or discharge, most, if not all, of his or her debt. In a Chapter 13 personal bankruptcy, an individual can save a home from foreclosure, a car from repossession and structure a plan to pay back as little a small percentage on the dollar of their general unsecured creditors. Before an individual decides to file for any type of bankruptcy, or decides what type of personal bankruptcy they want to file, he or she needs to consider their goals and assess their personal financial status.
Before deciding to declare either a Chapter 7 personal bankruptcy or a Chapter 13 personal bankruptcy, the individual would be well advised to ask a series of questions. What types of debt do I have? Can I discharge the debts I have in a bankruptcy? Do I want to use bankruptcy to stop a foreclosure? Do I want to use bankruptcy to stop my car from being repossessed? Do I want to use a bankruptcy to walk away from mortgage I cannot afford? Or, do I want to walk away from a mortgage on a property that is simply no longer worth paying anymore? Do I want to walk away from a car that I cannot afford? Do I want to use bankruptcy to help pay back past due personal income taxes or student loans? Once an individual has determined what goal you would like bankruptcy to achieve, you must examine your personal financial situation to determine if you qualify for the type bankruptcy that will meet your goals.
After deciding on a goal for your personal bankruptcy filing an individual needs to assess his or her eligibility. For instance, if you want to walk away from your unsecured debt and if you have not filed for Chapter 7 Bankruptcy in the previous eight years or a Chapter 13 Bankruptcy in previous six years, if you spend more money each month than you make, or if you earn less than the average household size in your state and you no assets worth liquidating, perhaps you should consider decaling a Chapter 7 Bankruptcy filing.
In the alternative, if you do not meet the above qualification you might need to consider a Chapter 13 Bankruptcy filing. Even in a Chapter 13 Bankruptcy an individual can eliminate or discharge most of your general unsecured debt. Or, if your goal is save a home from foreclosure or a car from repossession, and you have extra income left over at the end of the month, you should consider declaring a Chapter 13 Bankruptcy.
Contact a Legal Helpers attorney right away to help assess your bankruptcy goals and assess for eligibility for either a Chapter 7 Personal Bankruptcy or a Chapter 13 Personal Bankruptcy.
