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Bankruptcy Legal

What Bankruptcy Can and Cannot Do

You’ve pulled the plug and filled for bankruptcy, attempting to overcome the massive debts placed on you. Still, even bankruptcy has its limits, and you need to figure out what you can and cannot do. Using bankruptcy to combat your debt can work, especially if you are besieged by collection calls and lawsuits.

There are two common chapters of bankruptcy. Chapter 7 allows you to liquidate some of your property or assets to gain some cash. Chapter 13 puts you on a payment plan to make sure that the debts can be paid over a few years. Each plan has different benefits for you, and here’s what filing for bankruptcy can mean for you.

What Does Bankruptcy Do?

Bankruptcy can stop collection calls, garnished wages, and lawsuits. It can also stop various types of debt, with some exceptions. While credit card debt, medical bills, and personal loans can all be stopped, you will still need to pay some debts regardless of the plan you pick.

You can file Chapter 7 or Chapter 13 bankruptcy, and they will help you wipe out your debt. Even with different benefits and drawbacks, the most important thing to know is that they give you all the tools to manage your debt.

Bankruptcy also stops the harassment from creditors using an ‘automatic stay’ put in place by the court. This stops creditors from coming after you and puts a freeze on lawsuits and wage loss. It can also temporarily freeze an eviction, repossession, or foreclosure on a piece of property.

Depending on which chapter you get, you can either create a payment plan to handle the debt. You can also liquidate some of the assets. Either way, you’ll be able to pay off the frozen loans and potentially remain in the house without an eviction.

What Can’t It Do?

Bankruptcy, as powerful as it is, is not a cure all for your debt woes. For starters you will need to pay required payments such as child support and alimony, and you won’t be able to stop the foreclosure of a property that you cannot reasonably afford. The creditor can still take a lien where they can sell the property at auction and that money goes towards your loans.

Student loans also can’t be eliminated unless you can prove that you will have ‘undue hardship’ by repaying them. It’s a tough standard to be qualified for, and you will need to prove that you can’t pay for your loans now or in the future.

Tax debts and other nondischargeable debts cannot be paid off as well, and they will either stay with you or you will pay them in full through the repayment plan. This depends on which chapter you file for.

Bankruptcy is a powerful tool, but it does have its limits for your business. Make sure to talk to an expert before filing, and you will be able to get a clear picture of how bankruptcy can help you.

Categories
Bankruptcy Legal

Why Should I Hire a Bankruptcy Lawyer?

When you’re facing bankruptcy, you’re likely going to have more than a few doubts about the situation. How do you do it? Are there any other options? Is it just a matter of filing and getting on with life, or is the process continual?

But for all of your doubts, you still might be on the fence about getting a bankruptcy lawyer. This is understandable, especially considering the reputation lawyers usually have for being expensive. In a time like this, you’re going to want to pinch all the pennies you can. But can you really afford to skimp here?

In this article, we’ll talk all about what kinds of benefits may compel you to hire a bankruptcy lawyer, as well as what kind of investment a bankruptcy lawyer is and why it might just pay off in the long run.

Think About Your Options

The funny thing about considering bankruptcy is that about 50% of the process is about considering other options. Bankruptcy is a big- no- possibly the biggest financial decision a person can make, and people make it pretty regularly. That’s why you want to have everything in line and understand all your options.

For normal people, this can get a little complicated. Is there a way out that doesn’t involve bankruptcy? How can you tell its for real and feasible? What if you decide to go another route an it doesn’t work out? All these questions might be plaguing you.

Since the internet can only take us so far, it’s good to have a base of professional knowledge. And since we can only absorb so much of this professional knowledge, it’s even better to have dedicated professionals who can help us figure out the specifics of how this information applies to our situation.

Bankruptcy lawyers are just these professionals. They help you figure out what type of bankruptcy to file, whether or not you need to file bankruptcy in the first place, and what you need to do to prepare to file for bankruptcy. Having all these things handled and out of the way will bring greater peace of mind in a stressful time.

Bankruptcy lawyers have been working in their fields for years, and will have encountered hundreds of different bankruptcy situations. Your specific situation will be easily understood by a lawyer with such broad experience. This isn’t a the lawyer’s first rodeo.

Why Make the Investment in a Bankruptcy Lawyer?

An investment is a big ask when you’re filing bankruptcy. Considering the way things have been going financially, you might be tempted to put down the checkbook and start handling things yourself. This, however, may be one of the most beneficial things you do during the whole process.

Bankruptcy lawyers will notice if things go wrong during the process, and will be able to handle bumps in the road quickly and efficiently. Navigating this rocky sea yourself may take you for a pretty confusing ride. It’s good to have a professional on your side.