It seems as if many people are looking for bankruptcy advice today, and with the state of today’s economy, that should not be a surprising fact. But if your financial situation is in such a state that you are seeking bankruptcy information, have you also considered your alternatives? Part of the whole process is knowing exactly where you stand and making an intelligent determination as to whether or not going bankrupt is really your best option.
Typically, bankruptcy should be considered as your option of last resort, and should only be used when you really have no other options. Just being tired of paying all your bills and being behind on many of them is not sufficient reason to file for bankruptcy, and in fact in a case like that, the courts may not even approve you to file. Yes, with the changes in bankruptcy law, you need federal court approval to file, it cannot be done on a whim.
Bankruptcy is a financial state that occurs when a person or business can no longer repay its debts. In the legal sense, bankruptcy begins when a court recognizes that the financial state of bankruptcy exists. Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor (“involuntary bankruptcy”) in an effort to recoup a portion of what they are owed or initiate a restructuring. Bankruptcy is a situation that no one wants to face.
For consumers and individuals, you can either file Chapter 7 or Chapter 13. Let’s look a bit closer at what those are.
Bankruptcies are filed under the following chapter headings. Chapter 7–Straight bankruptcy; debtor gives up non-exempt property and debts are discharged. Bankruptcy will always be the rope for people too deep in the quicksand, but it’s best to learn to read the warning signs and stay away entirely.
Chapter 7 means all your debts (with the exception of back child support, taxes, and a few others) are forgiven and you come away with a clean slate. Chapter 13 requires that you come up with a strict repayment schedule based on your income and assets to pay off as much of your debts as possible within a 5 year period.
One of the keys to remember here, however, is that the chapter you file is not your decision, it is a decision of the court, and that decision is determined by how your current financial information is presented to them. This is key, and is one of the huge reasons that money you spend on a bankruptcy lawyer is well worth the expense. They understand the law and are able to present your finances in a light that can lead the court to the desired decision.
But not putting the cart before the horse, one of the things you must do is get a bankruptcy evaluation with a qualified bankruptcy lawyer. They will review your finances and make recommendations as to your best options, which may not be bankruptcy, or even if it is, what you can expect if you move forward with it.
Your best option is to get a bankruptcy evaluation, which might be the best price of bankruptcy information and advice you will find anywhere. You cannot get to where you want to go if you don’t know where you are right now.