Individuals who find themselves in a situation where they are no longer able to pay off multiple debts may benefit from filing for bankruptcy, but there are many factors to consider before deciding if this option is right for them. Because the process of filing for bankruptcy and determining whether or not one is eligible can be time-consuming and complex, it is often beneficial to seek the assistance of a bankruptcy attorney. Read More Here about us.
There are many different types of bankruptcy, but the most common in the United States for private individuals or families are Chapter 7 and Chapter 13. When you file for Chapter 7, your assets are given to a court-appointed trustee, who can liquidate them to pay off your debts. Some assets, however, are exempt from liquidation, and these specific assets vary by state, which is why consulting a lawyer before filing can help you figure out which assets and property you can keep. Chapter 13 bankruptcy is typically filed by people who have a steady income and allows debts to be restructured in order to be paid off over time. Depending on a debtor’s assets, employment situation, and debt types, one or the other filings may be preferable. Because many state and federal laws are written in a complicated manner, consulting with a qualified lawyer can help.
Another factor to consider when deciding whether bankruptcy is a viable option is the type and amount of debts owed. Some types of debt can be frozen or eliminated by filing for Chapter 7 or Chapter 13, but others must still be paid off. While a utility bill may be discharged, student loans and child support payments are typically not. Furthermore, certain types of federal and state taxes are not dischargeable, but depending on the type of tax and the age of the debts, some of these taxes may be. It can be difficult to know which of these debts apply to one’s situation, which is why hiring a specialised attorney to review one’s debts can be extremely beneficial.
Bankruptcy laws and court filings are generally governed by federal law, but each state has its own set of rules regarding different assets and debt types. A qualified attorney may help a person determine which laws can apply to them, choose which form of bankruptcy to seek, file the required paperwork, and appear in court if necessary.