Bankruptcy is a difficult financial decision to make. Whether you own a struggling business or have been overwhelmed by personal financial debt, choosing to file bankruptcy may be what you need to save your company or make a fresh start. Hiring an affordable bankruptcy attorney is the first step in getting your financial matters back in order.
Chapter 7 – Businesses that file Chapter 7 go out of business and have all of their assets liquidated in order to pay off as much off as much of their debt as possible. When an individual files Chapter 7 bankruptcy they are allowed to keep only the minimum amount of assets. In both cases, unsecured debt is eliminated and creditors can no longer attempt to collect from the debtor. The process of filing Chapter 7 is rather fast and will move quickly once filing fees are paid.
Chapter 13 – An affordable bankruptcy attorney can help you file Chapter 13 if you have a steady income and are willing to pay off as much of your debt as possible. During a Chapter 13 bankruptcy, an agreement is made between the petitioner, the bankruptcy trustee and the creditors. The petitioner pays the bankruptcy trustee a set amount each month and the trustee then disburses specific amounts to each creditor over a 3 to 5 year period. During this time, the debt is reduced until the petitioner has reached a point where they are current on all debts. At that time, they are required to begin making regularly scheduled payments, much the same as was required before they got behind.
Reclaiming a portion of your debt – In some cases, bankruptcy trustees will allow a petitioner to reclaim one or two of their debts. This means they agree to make regularly scheduled payments to the creditor according to their original agreement. Petitioners can begin to rebuild their credit by reclaiming at least one of their debts. Often times, a petitioner will reclaim a debt on furniture or a vehicle so they can retain possession of the property.
Possible ramifications of filing bankruptcy – An affordable bankruptcy attorney can inform you how long each type of bankruptcy will stay on your credit report. Some debts will stay for four to seven years before dropping off. Bankruptcies, however, can stay from seven to ten years. A petitioner can put a footnote on the credit report explaining the reason behind the need to file bankruptcy such as medical hardship or a diagnosed disability.
Filing bankruptcy will dramatically affect your ability to obtain future lines of credit. Chapter 13 will allow you to recover your losses but will still remain as a part of your credit report. The report will remain positive as long as all payments are made according to the agreement between the petitioner and the bankruptcy trustee. For as hard as the decision to file may be, it comes with a peace of mind that there is a light at the end of the tunnel.
Get Resolution to Your Financial Problems – Speak with a Bankruptcy Attorney first.