Filing bankruptcy can sound like a scary process, but it doesn’t have to be. This is actually a very helpful legal option that you should consider. There are two main types of bankruptcy that you can file for, and each one can help you get out of debt. They include:
- Chapter 7 Bankruptcy – With Chapter 7, your lenders will be paid with any nonexempt assets you own. This can help you get out of most medical and credit card debt that you may have accumulated.
- Chapter 13 Bankruptcy – With Chapter 13, the court sets up a debt repayment plan for you. The plan will last from 3 to 5 years and the amount you pay back will be based on how much you earn. The best part is that by keeping up with this plan, any remaining debt will be eliminated.
Note: Chapter 7 can work as an immediate solution for those in debt, while Chapter 13’s repayment plan can be more beneficial for those who can keep up with regular payments in the long run.
You can easily set up a free consultation with a bankruptcy attorney who can walk you through the whole process.
By hiring a bankruptcy lawyer who is knowledgeable about all the different aspects of debt relief law, you can make sure that you choose the best debt relief plan for you based on your situation.
In order to file for bankruptcy, you must complete a number of steps, which include:
- Completing a bankruptcy counseling form from a qualified nonprofit credit counseling agency within 180 days before filing for bankruptcy.
- Fill out the numerous forms that must be completed and filed. Your case can be dismissed if you do not have the proper paperwork or if anything is considered incomplete.
- Once your bankruptcy petition has been filed, a court-appointed trustee will take over your case.
- You will need to meet with your creditors. The trustee will arrange these meetings, but you must attend them.
- If found eligible, your court-appointed trustee will determine whether or not the assets you own are worth selling. If sold, the funds gathered from your assets will go to your creditors.
- You may be required to attend an educational course before your bankruptcy case can be completed.
It can take between three and six months after you file your petition for your debt to be discharged. Once this happens, your eligible debts will be forgiven.