There is more than one kind of bankruptcy.
While most people think bankruptcy involves the court taking your assets and liquidating them to pay your creditors, this is Chapter 7 bankruptcy, and it’s not the only kind. Depending on your situation, Chapter 13 bankruptcy might be better for you.
If you are wondering, “Will filing bankruptcy ruin my life?” you’re probably thinking of Chapter 7. Self employed bankruptcy can be especially scary since your finances and your business are closely tied together. What if you’re not okay with your assets being repossessed?
With Chapter 13 bankruptcy, you can let go of wondering “Will bankruptcy ruin my life?” With the help of a local bankruptcy lawyer, you can create a plan that will allow you to keep your assets and pay your debts within three to five years.
This works better than Chapter 7 bankruptcy for many individuals and businesses, although there are some terms and conditions you’ll need to meet to be eligible. If your income is really unstable, the court might not allow you to declare Chapter 13 bankruptcy.
Do you go to court for bankruptcy? Not usually. Although there are many legal filings, you don’t need to argue your case in a courtroom, be cross-examined, or be judged by a jury. A local bankruptcy lawyer can handle everything for you.
When many people think of bankruptcy, they likely think of a Chapter 7 bankruptcy, which involves the total liquidation of an individual’s debts. There are downsides to Chapter 7 bankruptcy, such as the fact that it requires the filer to give up some of their possessions, that make bankruptcy seem like an unattractive option.
However, what if you knew that there was another option for filing bankruptcy that isn’t as absolute as a Chapter 7?
If you find yourself struggling to pay off your debts, then seeking the help of a Chapter 13 bankruptcy attorney for help with filing bankruptcy could help you manage your finances in a sustainable manner again.
But how do you really know if a Chapter 13 bankruptcy is your best option?
Here are the four easiest ways to tell if filing Chapter 13 bankruptcy is the right option for you:
1. You have trouble paying your debts: First of all, what is Chapter 13 bankruptcy? Any Chapter 13 bankruptcy attorney will tell you that it is an adjustment, not forgiveness, of your debts, that establishes a repayment plan with no interest that better suits your income. If you’re currently taking out more loans to pay for your existing debts, it might be time to consider filing a Chapter 13 bankruptcy.
2. You want to pay your debts: Many people are uncomfortable with the prospect of choosing to file bankruptcy with a Chapter 7 bankruptcy attorney because they feel morally obliged to pay back their creditors. Filing for Chapter 13 bankruptcy will allow you to repay the debt you originally created, fulfilling your moral need.
3. You’re sick of creditor harassment: When you can’t pay your bills, your creditors will let you know. Repeatedly. If constant phone calls from debt collectors are stressing you out to the point where it’s taking a toll on your well-being, it might be time to talk to a Chapter 13 bankruptcy attorney and see what your options are.
4. You want to hold on to your assets: Filing a Chapter 7 bankruptcy requires you to give up pretty much all of your material assets apart from your home and your car. If you have a large house and other nice possessions that you’ve worked hard to get, you should file Chapter 13 bankruptcy instead. More on this topic.