What is bankruptcy?
Bankruptcy is a legal procedure that can help consumers eliminate many debts and repay certain creditors. There are different types of bankruptcy for different situations. Depending on the circumstances, most people who file for bankruptcy choose to pursue either Chapter 7 or Chapter 13 bankruptcy. A lawyer with experience helping people get relief from their debts can help those considering bankruptcy to weigh their options and choose the right course of action for their unique circumstances.
Reduce or eliminate debts
One of the main benefits of bankruptcy is that it provides relief from debt. In many cases, people who file for bankruptcy can have some or all of their debts discharged. Some of the most commonly discharged debts during bankruptcy include credit card balances and medical bills. When these debts are discharged as a result of filing for bankruptcy, the borrower is no longer legally responsible for repaying the debt.
While many debts can be discharged during bankruptcy, others cannot. Thus, depending on the situation, some debts may remain after bankruptcy. Examples of debts that typically cannot be discharged in bankruptcy include past-due child support and alimony payments, certain tax debts and most student loans. However, even people who have some debts remaining after bankruptcy often find that it is easier to keep up with the payments as a result of having their other debts discharged.
When debts become unmanageable, a knowledgeable bankruptcy lawyer can help borrowers assess their debts and the financial situation and help to determine whether some or all of the obligations may be eligible for discharge through bankruptcy.
Stop creditor harassment
In addition to debt relief, one of the other main benefits of bankruptcy is a legal device called an automatic stay. An automatic stay is a court order that goes into effect immediately upon filing for bankruptcy, except in certain instances with previous bankruptcy filings, and stops most creditors from seeking payment or taking other collection actions against a person who has filed for bankruptcy.
An automatic stay can provide relief from bill collectors, and may also stop foreclosure, halt eviction proceedings and wage garnishments, as well as prevent repossessions. In addition, the automatic stay will stop the continuation or commencement of lawsuits against the individual. It can also be used to temporarily stop utility companies from turning off the electricity, gas, water or telephone service if a person is behind on his or her bills.
Protect family assets
In many cases, bankruptcy can also be used to protect the borrower's home or other assets from being seized to repay creditors. This can be especially helpful for people with debt, including business and tax debts, who wish to protect their family home or other personal assets from seizure. Individuals are entitled to the protection of exempt assets. While it may sometimes happen that an individual will have to forfeit certain non-exempt assets during bankruptcy, many people are able to file for bankruptcy without sacrificing any assets at all if the exemption rules are carefully followed. An experienced and qualified bankruptcy lawyer is the best chance of choosing the proper bankruptcy solution to avoid the loss of cherished personal belongings.
An attorney can help
To learn more about the different ways that bankruptcy may be able to help you to protect your property and get out of debt, contact a qualified bankruptcy lawyer in your area. An attorney with broad experience in bankruptcy can explain the various options that are available for your specific circumstances and will help you understand the risks and benefits of each potential course of action. If you choose to pursue bankruptcy, your attorney will guide you through the process and advocate vigorously on your behalf at every step of the way.
Article provided by Parker & Associates
Visit us at www.ninaparker.com/
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