Determining Whether Bankruptcy is the Right Solution for You
Almost every household in the United States has faced financial problems at some point. However, some may have completely lost control over their ability to cover their debts and pay for everyday household expenses. Unexpected loss of a job, serious illness or injury, natural disasters, and other life events can have a devastating effect on your finances. Once you fall behind on your debts, you may find it nearly impossible to ever catch up. The good news is that people who are facing overwhelming debt are not stuck in that situation for the rest of their lives. Instead, the law provides individuals and couples with the option to file bankruptcy in order to gain control of their finances.
Bankruptcy may be more common than you believe. In fact, the United States Bankruptcy Courts reported that 1,071,932 households or businesses filed for bankruptcy in 2013 alone. If you are struggling financially and think bankruptcy may be an option for you, you should consult with an experienced bankruptcy attorney as soon as possible.
How Bankruptcy Works
The bankruptcy process differs depending on the type of filing you choose. If you decide to file for bankruptcy, an attorney will first help you determine which type of bankruptcy is right for you. The United States Code allows for bankruptcy under the following:
- Chapter 7—This is the most common type of bankruptcy filed in the United States as it works to discharge, or wipe out, all of your qualified debts. Under Chapter 7, a bankruptcy trustee will liquidate some of your property in order to pay creditors and at the end of the process, any remaining debts will disappear and you will no longer have payment obligations. Chapter 7 is available for both individuals and businesses.
- Chapter 13—This type of bankruptcy is generally used by those who do not qualify for Chapter 7 or who have substantial property that they do not wish to liquidate. Under Chapter 13, your debts will be reorganized so that you can manage monthly payments for a period of three to five years. After that time period, the remaining balances will be wiped out. Chapter 13 is only available for individuals, but partnerships or sole proprietors may also benefit from Chapter 13.
- Chapter 11—Chapter 11 is available to individuals, but most commonly used by corporations. This kind of bankruptcy involves reorganization of debts much like Chapter 13. Corporations generally elect to file under Chapter 11 so that they may continue operations instead of liquidating and closing the business.
How an Experienced Bankruptcy Attorney Can Help
If you are struggling financially and cannot pay your bills, you should contact an experienced bankruptcy attorney to discuss your options for relief. A skilled lawyer can advise you on whether bankruptcy or another debt relief option is right for you and can guide you through the entire legal process so that you receive the most favorable result possible. Bankruptcy can help you obtain a fresh start and regain control over your finances, so please do not hesitate to call a bankruptcy lawyer for assistance today.