Overwhelmed With Debt? Is Bankruptcy Right For You?

Overwhelmed With Debt? Is Bankruptcy Right For You?

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Do you avoid discussions around your finances? Do you feel like you will never catch up with your bills? Are you overwhelmed at the number of hours you are working, and yet you are still unable to reduce your debt? The bankruptcy programs were created for you. Bankruptcy is a financial option for those struggling to stay afloat in their finances. There are two different types of bankruptcy and each one can lift the huge burden of debt.

Is bankruptcy right for you?

Filing for bankruptcy does not mean that you have failed. It simply means that you have gotten into financial trouble and could use a little help to get out. If you are overwhelmed with debt due to a financial struggle or event, bankruptcy may be an option for you. The majority of people filing for bankruptcy are personal filers, with 97% of bankruptcies in 2014 being person and only 3% business. You can establish your bankruptcy eligibility by working with bankruptcy lawyers. Your bankruptcy lawyers will go over your financial records and will recommend either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

The difference in bankruptcies

You are probably wondering what the difference between the Chapter 7 and Chapter 13 bankruptcies are. There are many similarities between the two chapters, including that both require a filing fee and specific documentation. However, the differences lie in the terms of the bankruptcy. A Chapter 7 sells of the debts and uses the funds to pay them off. A Chapter 13, on the other hand, rolls all of your debt into one affordable monthly payment. This payment is decided based on your income and other bills. Although you still have to make payments to your debt, they are much more affordable.

The need for bankruptcy lawyers

Some bankruptcy filers will attempt to file for bankruptcy alone. They will fill out and submit the documentation to the courts, and await their judgement. Although this is a possibility, it is usually not recommended. The legal process can be extremely confusing and difficult to navigate, even for bankruptcy cases. With bankruptcy, for example, very specific of documentation has to be submitted. It also has to be submitted within a strict timeline. The bankruptcy may be brought to court and heard in front of a judge. Without bankruptcy lawyers as your representation, it is possible that you will miss one of the crucial steps. You will have to start the entire bankruptcy process over, costing you additional time and funds.

The cost of bankruptcy

Filing for bankruptcy is not free. Bankruptcy filers must pay their attorney fees, as well as a filing fee with the courts. For a Chapter 7 case, the fee is $335. For a Chapter 13 case, the fee is $310. However, this fee is necessary to getting ahold of your overwhelming debt. Your bankruptcy attorney will work out the expected bankruptcy lawyers fees, potentially setting you up with a payment plan. Sometimes, the representation fees can be rolled into the bankruptcy payments.

The effect on your credit

A bankruptcy filing puts a ding on your credit. This ding, however, is usually the better option to late or missed payments, month after month. People who find it difficult to catch up with their debt will often cause more damage to their credit score. A bankruptcy is one single addition to your credit. Additionally, it will fall off within 7 to 10 years, allowing you to financially start over.

Roughly 75% of Americans are living paycheck to paycheck and 27% have no savings at all. One single emergency or unexpected payment can severely set them back financially. It can even put them into a debt that they are unable to catch up with. Bankruptcy is an option for those with overwhelming amounts of debt. With a bankruptcy, you can either diminish your debt completely or consolidate them into a single monthly payment. Bankruptcy lawyers can help you choose the right bankruptcy chapter and guide you through the filing process.

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