In a way, a bankruptcy filing helps an individual struggling with debt to repay his or her creditor within a certain period. Some of the most common cases that bankruptcy lawyers handle are about credit card bills and medical bills. The bankruptcy process is long, but to filers, it is worth the financial freedom they would eventually get. Those filing for bankruptcy, for example, immediately benefits from the automatic stay, which prohibits any collection activities by creditors and their collectors (a competent bankruptcy lawyer can explain this in more detail).

A bankruptcy petition is filed by a debtor in the bankruptcy court. There are different bankruptcy filings, depending on the specific types of debt and financial problems an individual is facing. Certain types of debt are often included when you declare bankruptcy (such as credit card debt, medical debt, and certain tax debt), but some are not (such as student loan debt, alimony, domestic support, or criminal fines and penalties).

 Bankruptcy proceedings must not be handled on your own. You would not want to get tangled in the intricacies of bankruptcy law. As such, it is advisable to hire a bankruptcy attorney to explain to you how to file correctly. He or she can also discuss with you the requirements, qualifications, and the entire bankruptcy procedure. It is also advisable to get expert legal help since filing for bankruptcy is a serious legal issue.

As mentioned, there are several types of bankruptcy, depending on the specific circumstances of the petitioner. File bankruptcy with both the present and future in mind. Look into your debt problems, whether what you have to pay off are mostly unsecured or secured debts. Decide what bankruptcy case will best suit your needs and will allow you to pay back your creditors.

Difference between Chapter 7 and  Chapter 13 

A Chapter 7 filing is also referred to as liquidation bankruptcy. For you to be qualified to file under this chapter, your disposable income, living expenses, total debt, and monthly payments (that you must and make) would be evaluated, among other things. The means test will also check if your monthly income is below the median income in your state. If you are qualified to file under this chapter, your bankruptcy trustee would liquidate your non-exempt assets and use the proceeds as repayment to your debt collectors.

On the other hand, Chapter 13 is also referred to as reorganization bankruptcy. With this bankruptcy proceeding is a repayment plan, which will allow you to eliminate debt and, at the same time, stop foreclosure or repossession of your personal property. This payment plan often runs up to three or five years. You essentially restructure your finances and reorganize your debts to pay off your existing loans and debts. Aside from foreclosure, this can also stop wage garnishment.

Regardless of the chapter, a usual reason why individuals file for bankruptcy would be credit cards. Since they are often considered as unsecured debts, they can be discharged in the case of bankruptcy Chapter 7 (a discharged debt is essentially debt that is forgiven through a court order).

Note that a credit card is only considered a loan if it has an existing balance. Otherwise, you do not need to list it down as a debt in your petition for bankruptcy. When filing Chapter 7, you may be able to retain your credit card after your discharge. In contrast, when you file a bankruptcy petition under Chapter 13, your trustee must first approve debts after bankruptcy is filed. As such, it may not be worthwhile to keep your card.

If you are considering bankruptcy, consult with the best bankruptcy attorneys to rebuild your financial future and have a fresh start at life. Call us at WantAFreshStart, LLC for legal help and assistance on paperwork for your petition in bankruptcy.