Dealing with an outrageous debt situation can be quite a difficult task, especially when you are not aware of the most appropriate debt solution for you. If you are seeking an efficient way to clear your debts and make a new and fresh beginning, bankruptcy can be an ideal option for you. However, it is necessary to consult an expert legal advisor to get appropriate bankruptcy advice to help you decide whether it is a beneficial legal option in your financial circumstances. Before you opt for bankruptcy as a debt solution, it is important for you to obtain appropriate bankruptcy help in order to know all the benefits and losses involved in the procedure.
There are various types of bankruptcies designed to cater to the needs of different financial situations. Personal bankruptcy is a legal procedure that can be availed by individuals to declare their inability to make debt payments. Let us discuss some of the significant facts associated with personal bankruptcy to know if it is an appropriate option for you.
- Personal bankruptcy is applicable only in case of unsecured debts such as unsecured loans, back taxes, payday loans, credit cards, overdrafts and many more. It cannot help you to get rid of secured debts. Moreover, even if you file for bankruptcy, you would have to continue making payments for various other kinds of debts such as alimony and child support, student loans, court fines charged for offenses committed by you etc.
- Personal bankruptcy is of two types, namely, chapter 7 bankruptcy and chapter 13 bankruptcy. Chapter 7 bankruptcy is a procedure in which the court seizes your assets for paying off your debts. On the other hand, in chapter 13 bankruptcy, you do not have to lose your assets. In this procedure, you are provided with an easy repayment plan enabling you to pay off your creditors on an easy monthly rate over a fixed time period.
- The payment plans are made keeping in mind your conveniences and financial affordability. In order to decide the most appropriate option for you, seek bankruptcy help from an experienced attorney.
- In order to file for bankruptcy, a credit counseling course needs to be completed under a licensed credit counselor.
- If you want to file for chapter 7 bankruptcy, you need to get through a means test to prove your eligibility to opt for it. A means test is carried out to prove that your annual income is less than your state’s median income for the size of your family.
- It is compulsory for you to present at the court all documents proving your monthly income and your expenditures that you may have received during the six months time span before filing for personal bankruptcy. These documents include the detailed information of your bank records, a pay stub, a copy of a paycheck, rental agreements, etc. You also need to provide detailed information regarding the debt amount you owe along with the list of your creditors.
- You can file for chapter 13 bankruptcy as many times and as frequently as you need. However, in case of chapter 7 bankruptcy, though you can file for it as many times as your financial situation requires, you have to maintain an 8 year time gap between two filings in a row.