There are a number of reasons why people seek the services of a bankruptcy law firm. In addition to student loan debt, unpaid medical bills are a factor when filing for bankruptcy. In 2013, for example, approximately two million people in the United States were affected by bankruptcies for this reason alone. During the same year, there were 8,980 Chapter 11 bankruptcies filed and 333,626 Chapter 13s.
A General Overview of Bankruptcy
According to Debt.org, both a judge and a court trustee will be involved with determining whether or not a declaration of bankruptcy is valid. After evaluating the applicant’s assets and liabilities, a determination will be made to have these debts discharged or repaid.
Debt.org also stresses the point that even though bankruptcy may enable someone to “start over,” that it does affect credit scores and other financial situations. A Chapter 7 bankruptcy, for instance, will remain on an individual’s credit report for ten years post arrangement.
On the positive side, however, filing for bankruptcy may “prevent or delay” these and other financial actions:
- Home foreclosures
- Vehicle repossessions
- Wage garnishments
A Brief Overview of Chapter 7 Bankruptcy
When someone files Chapter 7 bankruptcy, Debt.org states that the court may release someone from being obligated to repay their debts. There are some assets which the filer may be able to keep because they are referred to as “exempt property.” These exemptions do vary depending on the state within which a bankruptcy is filed. That said, since state and federal laws differ on the amount of possessions that may be retained, it’s important to determine which would be more beneficial. In order to repay some of an individual’s debt, property that isn’t exempt will be sold.
A Brief Overview of Chapter 13 Bankruptcy
Debt.org indicates that there is a debt limit for filing a Chapter 13 bankruptcy. In order to determine whether someone’s debt does not exceed this amount, it’s important to speak with an attorney or credit counselor. This is because these amounts tend to fluctuate.
When someone files for a Chapter 13 bankruptcy, the understanding is that they will be paying some of their debts in order to have others waived, according to Debt.org. This is usually the option chosen by individuals within a high income bracket or those who aren’t interested in relinquishing their property.
Schedule an Appointment With a Bankruptcy Law Firm
If you want to find debt relief, there’s an excellent chance you’re looking for a low cost bankruptcy attorney in your area. While the costs for filing bankruptcy cases do vary, a Chapter 13, for example, may cost less than $500.00 to file in Texas. Once you meet with a bankruptcy law firm, you will be able to receive the legal advice needed begin this process. Your bankruptcy attorney will also be there to respond to your questions and concerns.