A Basic Guide to Consumer Bankruptcy
Sadly, more and more consumers are reaching the point where the word bankruptcy begins to appear in their minds. This is usually due to the simple fact that their income is no longer meeting the demands of their debts, and they don’t see a way to turn things around. This is actually happening at higher levels each year because of high unemployment, higher costs of living, and tighter credit.
So, if you are one of the millions who is considering all of your options and finding bankruptcy to be the most likely, you should know a few basics about the issue. First of all, there is not a single type of bankruptcy, but a few variants. They are identified by chapters. There are chapters for consumers, businesses and other entities. The two most commonly used chapters for consumers are:
How do you know which is the right one for you? You can use the information here for a bit of guidance, but any financial or legal expert is going to tell you that bankruptcy is not really a do-it-yourself venture. Yes, a lot of people try to tackle it on their own, but the best way is to use the help of a knowledgeable bankruptcy attorney.
Why? Consider that state laws may vary and that the entire bankruptcy process has to be followed according to special deadlines and documentation. If you botch even a single step of the process, it could lead to your case being delayed, disrupted, or ended.
This is extremely crucial when you realize how each of the chapters might affect your life. For example, in a Chapter 7 filing you are saying that you cannot repay the debt in any way at all. This is a method of wiping the slate clean, but it can mean you have to forfeit a home, and all other possessions in the process. Sounds like a time for an attorney, doesn’t it?
Is the Chapter 13 less severe or challenging? Not really. This is a way of stopping a foreclosure on a home or reorganizing your debts. It requires a lot of things from the person filing, including steady income and the ability to remain in line with a court ordered form of repayment on any of the debts put into the case.
Clearly, these are technical issues and require knowledge and follow through. Often a good attorney will be able to ensure everything is resolved to the best level possible.