Financial hardship can cause a great deal of stress. Worrying about how to pay bills, support your family, and maintain your house can take over your every day life. In these cases, it is not uncommon for families to consider filing for bankruptcy. More than 9,000 people filed for bankruptcy in Indiana during the third quarter of 2012 alone. Epiq Systems predicts that 1.25 million Americans will file this year alone, which is only slightly lower than last year’s numbers. Two of the most common bankruptcies filed in the U.S. are Chapter 7 and Chapter 13 bankruptcy.
In a Chapter 7 bankruptcy, you are more likely to lose your property. A bankruptcy trustee assigned to your case liquidates most or all of your debt, often using your property to pay off your creditors. They also stop creditors from collecting debt from you. You have to pass means test to qualify for this type of bankruptcy, which determines if your income is lower than the average income of a family your size in the state in which your reside.
A Chapter 13 bankruptcy is less harsh on a debtor, but places more emphasis on restructuring your finances. You can keep your property, but you must be able to pay back your creditors within a 3 to 5 year time frame using your income. If you do not have a steady income, or if it is irregular, the court can throw out your request to file Chapter 13 bankruptcy. You also may not have more than a certain amount of secured and unsecured debt to your name. Before filing either chapters of bankruptcy, most debtors also have to undergo credit counseling to help them reorganize their financial situation.
If you are considering bankruptcy, you should consult with bankruptcy law attorneys before proceeding. Many states allow you to represent yourself, and there are websites that offer you bankruptcy tips and tricks for filing on your own. But a trained lawyer will understand all the legalities of bankruptcy law, and help you determine which chapter bankruptcy would be right for your situation. You can also ask them for bankruptcy tips and tricks, and important questions including, “Is bankruptcy right for me?” You may think that it is only option you have, but a bankruptcy lawyer could suggest other solutions you may not have considered.
Make the difficult process of bankruptcy easier by working with an attorney. The professional advice, and bankruptcy tips and tricks he or she gives you will be worth the money.