The Benefits of Bankruptcy

While many individuals are well aware of the social stigma surrounding bankruptcy, few can see past the commonly believed but certainly unfounded bankruptcy myths to appreciate the true benefits of bankruptcy. If you have fallen deeply into debt, an attorney from Price Law Group can talk you through bankruptcy and extoll the many benefits associated with this process. It is important to remember that no two financial situations are exactly alike; you are advised to consult a knowledgeable attorney to do a full evaluation of your finances and discuss your options.

Will filing a petition help me?

There are two basic forms of bankruptcy: chapter 7 and chapter 13. Each type of bankruptcy comes with benefits and disadvantages. Chapter 7 "liquidation" bankruptcy is advantageous in that it is specifically designed to help individuals with no mean of paying off their financial obligations. Chapter 7 may discharge all unsecured debts, halt any lawsuits filed against the debtor and prohibit your creditor from attempting to collect any payments from you. Although chapter 7 bankruptcy may liquidate your assets, you probably won't lose all of your belongings.

For instance, your clothes, wedding rings, furniture, appliances, tools, books, and other belongings are probably exempt from liquidation. Under the right circumstances, you may be allowed to keep your home, too. Many people are afraid to file for bankruptcy because they are afraid of losing their house an personal possessions. This is will not necessarily happen. Just remember: everyone's financial situation is different and with the right legal help on your side, you can make an educated decision for the security of your financial future.

Unlike chapter 7 bankruptcy, chapter 13 is designed to help people who are overwhelmed by their debts but not unable to pay them off. If you have a substantial income, you may qualify for chapter 13 bankruptcy. After filing a petition for chapter 13, you will enter a payment plan (usually lasing between three and five years) that allows you to pay off your unsecured debts with no interest. Chapter 13 is designed to reduce your monthly payments but still give you the opportunity to pay off your outstanding financial obligations.

Just like chapter 7, chapter 13 will prohibit creditors from attempting to collect payments. As with any debt, your creditor is not allowed to abuse, harass or take advantage of you, either. After your petition for chapter 13 is accepted, your monthly payments will be reduced and your debts consolidated. Under certain circumstances, your mortgage payment may be included in your debt consolidation. This means that your home will not be foreclosed if you continue paying regular payments under your new, chapter 13 plan.