For anyone who is struggling with debt and is looking for the best possible solution, the choice to file for bankruptcy can be a tough one to make. Declaring bankruptcy has enormous consequences, and it can drastically affect your life in the long run. However, there are both advantages and disadvantages to filing for bankruptcy. If you would like to learn more about what exactly that would mean for you and whether it is right for you, you may want to talk to a lawyer that has guided clients through bankruptcy for personalized information and advice. If you are going through the following scenarios, then bankruptcy may be the sensible option.
You have unsecured debt
If you are like many people, you probably have debt such as medical bills, car loans, credit card bills and utility bills. As a bankruptcy lawyer can share with you, these debts are called unsecured debt. These are common types of debt, and you may be able to have them discharged if you qualify for Chapter 7 bankruptcy. If you have several missed payments and are having a difficult time staying on top of your various debts, then moving forward with bankruptcy can bring you relief. Getting rid of certain types of debt can allow you to better manage other remaining debt that you have to pay off.
You are being threatened with foreclosure
For homeowners who are going through financial issues and are at risk of losing their home, bankruptcy can bring relief. Under Chapter 13 bankruptcy for example, it temporarily halts the foreclosure process. This is known as an automatic stop. In exchange for preserving assets, people who file for Chapter 13 bankruptcy must agree to fulfill a repayment plan, as a lawyer such as one from The Law Offices of Neil Crane can tell you. Chapter 13 bankruptcy requires debtors to pay their remaining debts over a certain period of time, roughly three to five years.
You have a large amount of debt
Having an extremely large amount of debt can affect your life in many ways, such as your ability to establish savings and stick to a determined budget. It can seem impossible to pay off. However, filing for bankruptcy can eliminate a large amount of your debt, helping you achieve your financial goals. While bankruptcy does impact your credit score, it is a temporary fall and eliminating all or a large chunk of your debt can be worth it. Declaring bankruptcy ultimately allows you to wipe out your debt so that you can have a fresh financial start.
There are many things to consider when you weigh whether to file for bankruptcy. Before you make a decision, think of what type of debt that you have and whether bankruptcy will help you to achieve your specific goals in the future. While it can be an intimidating decision, declaring bankruptcy may bring you the relief that you are searching for. To find out more about what bankruptcy involves and whether you qualify, don’t wait to take action. If you would like to receive more personalized feedback regarding your financial options, request a consultation with a lawyer that clients trust.