Facts About Bankruptcy

Facts About Bankruptcy

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Updated 1/19/21

Check out options for relief with your debt when you notice you are struggling financially. It is best when you declare bankruptcy for consumer debts that can be erased. That way you can avoid those that would have taken you five years or more time to pay off the debt, and the debts equal to more than half of your earnings or income.

Why do people prefer chapter 7 bankruptcy rather than chapter 13?

Most people prefer chapter 7 over chapter 13 bankruptcy because it does not necessitate one to repay any debt to creditors. Chapter 13, bankruptcy requires one to pay the remaining amount after monthly expenses to your creditors for three to five years. Do you know which bankruptcy to file? If not, seek the help of a bankruptcy law firm. There are several types of debts with most unsecured debts being discharged in chapter 7 bankruptcy.

Who can declare bankruptcy?

Anyone is allowed to file bankruptcy. It is, however, true that not everyone is qualified to file any bankruptcy. Only honest people who cannot afford to pay bills to qualify to file bankruptcy. People who have previously filed for bankruptcy may affect the options you have.

In 2011, 1,362,847 people filed for bankruptcy. Hiring a Los angeles bankruptcy attorney is an important decision for anyone claiming bankruptcy los angeles. There are a number of protocols and guidelines that must be followed in order to qualify for bankruptcy and a Los Angeles bankruptcy attorney will know what procedures to follow and how to make the best out of an otherwise stressful situation.

Bankruptcy is essentially a financial fresh start. When a person is so far in debt he or she can not recover claiming bankruptcy may be the best solution. However, the debtor may be required to turn over property for liquidation that is not considered to be exempt. The debtor will also continue to be responsible for paying taxes, alimony, child support and student loans.

A Los angeles bankruptcy lawyer would be able to explain what assets are considered exempt when declaring bankruptcy and which will most likely be required for liquidation. The Los Angeles bankruptcy attorney would also be able to inform the debtor what debts will not be covered by the claim.

Filing for bankruptcy does, however, stop debt collectors and creditors from pursuing outstanding debt or credit, and also stops lawsuits or legal proceedings including foreclosures and garnishments. A Los Angeles bankruptcy attorney will be available throughout the process to make sure everything went as expected and no unauthorized continuation of debt collection or legal proceedings takes place.

When considering hiring a Los Angeles bankruptcy attorney it is important to realize that all credit will be reset, requiring the debtor to rebuild his or her credit score. It will also be difficult to acquire credit through companies after filing for bankruptcy, though some companies will give credit to people who have filed, however, interest rates will be higher. It is best to begin rebuilding credit as soon as the discharge has been set.

The best move for anyone making a bankruptcy claim is to hire a bankruptcy attorney. Bankruptcy is a fresh start financially. The attorney knows the guidelines and protocols followed to qualify for bankruptcy.

Bankruptcy Attorneys

Bankruptcy attorneys give legal advice and are in charge of handling the paperwork from the beginning to the end of the case.

Here are some of what one should expect from these attorneys:

  1. He or she should be competent
  2. Able to offer sound legal advice
  3. Should file and prepare the paperwork
  4. Representation at the hearings

Bankruptcy and Collections

Filing for bankruptcy immediately stops debt collectors from taking any action. This because they are given a notice from the court to prevent them from any action. They also are barred from asking for any details about the lawyer.

Bankruptcy and Taxes Owed

Not all taxes are eliminated during bankruptcy collections. Chapter 7 is the best option when one needs to discharge tax debts. Federal tax liens cannot be discharged, and if the tax lien is recorded before filling the bankruptcy claim, the lien will remain on the property.

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