Compassionate Bankruptcy Lawyers To Guide You To A Fresh Financial Start

When money troubles get out of control

On Behalf of | Apr 27, 2023 | Bankruptcy

For people having significant financial problems, bankruptcy can be a way out of the chaos that comes from continually calling collection agencies, court orders, and other money-driven stressors. Taking the necessary proactive steps can help you achieve your goal of a total monetary do-over.

Chapter 7 and 13 filings dropped during the worldwide pandemic thanks to government stimulus programs that included enhanced tax credits combined with protection against eviction and home foreclosures; inflation rose while COVID-19 aid fell. Financial experts fear another rise.

The process of filing for bankruptcy is complex. While resolving long-standing money problems, credit histories with a debt discharge or reorganization can limit options when it comes to future loans and mortgages. Simply put, it should be a last resort when cars are repossessed and wages are garnished.

Choosing the chapter

Chapter 7 represents a majority of filings and can discharge most personal debts. However, property may be seized or sold. Protections exist for various assets, including retirement account balances. Alimony, tax debts, and student loans will remain on a consumer’s “balance sheet.”

Qualifying requires passing a means test to prove your income is below the median. If it doesn’t, another option exists.

Chapter 13 bankruptcy is a repayment plan that usually lasts five years. It also allows for the possibility of a certain amount of unsecured debt forgiveness while allowing filers to keep some of their personal property.

What not to do

While failing to disclose certain assets in bankruptcy filings may be tempting, the consequences are significant, including the seizure of all assets and potential criminal charges. Maxing out credit cards and accessing retirement funds is also not recommended.

A fresh financial start can make a difference in your financial bottom line and overall quality of life. Gone are the stressors over finances as you look forward to a more financially stable future.