5 Steps to Considering Bankruptcy

Considering Bankruptcy?
In today’s tumultuous financial times, nearly everyone is dealing with money issues. Living with spiraling debt, pending foreclosure and harassing debt collector phone calls every day turns tomorrow into dread. One mode of relief is to consult with a consumer bankruptcy attorney and file for bankruptcy. While the action of filing for bankruptcy no longer carries the societal stigma it once did, the decision to perform a bankruptcy is not one to be taken lightly. It’s funny how everyone seems to become a self proclaimed expert on the law in times like these as there is a great deal of misinformation floating around the Internet and social circles about it. While considering bankruptcy, be sure to consider hiring the services of a consumer bankruptcy lawyer. Bankruptcy is the legal term for the courts granting an individual protective relief from their creditors. It comes in a couple common forms for the individual.
Chapter 13 Bankruptcy, the most common, is reorganization of an individual’s debt. The individual filing for chapter 13 must report all of their assets and liabilities owned or owed. The court then analyzes the potential disposable income an individual can afford to repay and creates a 3 to 5 year plan based on that information. Creditors do not receive all of the money they are owed and the individual generally keeps their property. There are certain annually adjusted debt limits that an individual must fall within to qualify for chapter 13 protection.
Chapter 7 Bankruptcy is liquidation of assets. This form of bankruptcy results in forfeiture of property except certain exemptions and normally does not expunge the liens on property if kept. Chapter 7, instead of chapter 13 bankruptcy, may be necessary depending on the amount of disposable income an individual has available to them. Individuals should also consider that a bankruptcy stays listed on credit reports for many years and can affect one’s ability to borrow again in the future. This means home loans, car loans and other types of personal loans may not be obtainable for up to a decade or more. A consumer bankruptcy lawyer can best advise on the affects this will have on one’s life.
Why and how to file for a particular form of bankruptcy is not a simple determination. The legal system is complex. Many legal rules must be strictly adhered to during and after a bankruptcy proceeding. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 added many new provisions to the process of bankruptcy filings, such as credit counseling requirements, special income means testing, special residency requirements, liens avoidance concerns, stricter debt scope types for discharge, multiple discharge limits, limits on eviction proceedings protections and special notification requirements. An experienced consumer bankruptcy lawyer can help an individual fulfill all of these requirements.
Any decision to file should be fielded through a consumer bankruptcy attorney. They have the experience and training to properly decide on methods to employ so that the plan of action is appropriate for an individual’s circumstance.