If you feel as though you are drowning in debt, you’re not alone. Many Americans are facing the exact same challenges of trying to stay afloat in these troubled economic times. With a loss of gainful employment sometimes the only way a family can survive is on credit. However, at some point those bills are going to come due. One solution to help ease the strain of a financial collapse is to file for bankruptcy. In order to do that you need to understand exactly what you’re getting into. More importantly you want to be able to consult an experienced Woodland Hills bankruptcy attorney or a Van Nuys bankruptcy attorney. These are the exact kind of professionals who can help you navigate through these troubled waters.
There was a time, not too long ago, when filing for bankruptcy was almost as common as filing for divorce. The financial institutions have clamped down and made the qualifications for bankruptcy much more restrictive. The first thing you need to understand is that a bankruptcy has to be granted by a court. In essence, you will be going on trial before a judge which makes hiring a bankruptcy attorney even more important. Standing before a judge is not something you want to do alone especially with such important matters as your financial security.
There are two types of bankruptcy filings you can consider: Chapter 7 or Chapter 13. With a Chapter 7 bankruptcy filing you are offering up all of your assets to pay back your debts. Even if the amount of money you raise isn’t enough, you are basically surrendering these assets to your creditors as if to say, “This is all I’ve got. Take it!” As you might be advised by a bankruptcy attorney, this is a practical option for someone who might own property and can sell that for a decent price. With this type of bankruptcy all of your debts will be wiped out and you will be starting completely over in terms of rebuilding any credit.
A Chapter 13 bankruptcy is a way for you to hold onto your assets and repay what you owe in a more manageable plan for your circumstances. Sometimes this is accomplished through a court ordered wage garnishment. With a Chapter 13 bankruptcy, the creditors will be told this is the deal and that’s all they are going to get. They can no longer hound you for money. If they continue the harassment then your attorney can step in with a cease and desist order to end it all.
In both of those scenarios a large portion of your debt can be erased, but you’ll also have that blemish on your credit report for up to seven years. This means it can become extremely difficult to borrow money for a new car or get approval for a home loan. However, it certainly isn’t the end of the world. As a seasoned attorney will tell you, filing for bankruptcy means you’ll be able to make smarter choices about your financial future.
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