To File or Not to File? Before You File Bankruptcy

If you are struggling with debt, bankruptcy might be something you are considering. Bankruptcy allows individuals to obtain immediate relief from creditors and get a fresh financial start.

Is Bankruptcy Right for Me

You may want to consider bankruptcy if:

• You are having difficulty paying your debts
• A lawsuit has been filed against you
• Your wages are being garnished
• Your home is in mortgage foreclosure or repossession
• You have lost your job
• You have high, unpaid medical bills

Bankruptcy can be beneficial for those with financial difficulties. However, it can be a stressful and emotional process and should be only taken as a “last resort.”All alternatives should be thoroughly exhausted and considered before filing for bankruptcy protection.

How Can Bankruptcy Help Me

In simple terms, bankruptcy grants debtors relief from creditors. However, the bankruptcy process does much more than that.

Some things bankruptcy does:

• Discharge debts: it eliminates the legal obligation to pay most or all of your debts.
• Halts foreclosure of your home and allows you to catch up on missed payments.
• Stop repossession of a car or other property, or, in some situations, force the creditor to return property even after it has been repossessed.
• Stop wage garnishments.
• Stop debt collection harassment.
• Restore or prevent utility providers from discontinuing service due to nonpayment of previous bills.

Some things bankruptcy doesn’t do:

• Debts that arise after bankruptcy won’t be discharged.
• Bankruptcy only discharges unsecured debts. Child support, alimony (spousal maintenance), certain other debts related to divorce, most student loans, court restitution orders, criminal fines, and most taxes will not be wiped out.

What Types of Bankruptcies are there

For individuals, there are two types of bankruptcy available: Chapter 7 and Chapter 13. Depending on your situation, one may be more beneficial than the other.

Chapter 7 is also called fresh start bankruptcy, or liquidation. All unsecured debts will be discharged, or liquidated. A trustee will be assigned to your case and will sell any non-exempt property to pay off creditors. Food, furniture, and clothing are all exempt property.

Chapter 13 bankruptcy is a reorganization of debts. You will create a payment plan to pay off debts that span anywhere from three to five years. You will be allowed to keep valuable property, such as your home or car, which you might otherwise lose due to past due payments.

If you have been faced with financial hardships that have made it difficult for you to pay off creditors, The Law Office of Michael A. Siddons is here to help! Call me today to set up a personal meeting to determine the best course of action (610) 255-7500.