Is Debt Relief Legal Through Bankruptcy?

Is Debt Relief Legal through Bankruptcy? If you are deciding about declaring bankruptcy

, then probably you are suffering from major financial problems due to unforeseen circumstances. Usually, we do not incur debt that we feel certain we will not pay. We incur debt with the purpose of making repayment. While abuse of the system is of concern and there are those who use bankruptcy to wipe their slate clean just to fill it up again, this is not what your average bankruptcy filer does.

Bankruptcy is a legal vehicle that gives relief to individuals and businesses in serious financial crisis and protects their creditors to the extent possible. Generally, the bankruptcy process assesses the debtor's assets and liabilities and provides a structure within which the debtor is permitted to keep some, and in most cases, all property and ordered to satisfy as many qualified debts as possible, according to an order of priority established by law. Remaining debts are discharged, except those of certain types, like domestic support orders, debt obtained by fraud and most tax debt.

The purpose of a Chapter 7 bankruptcy is to provide debtors with a fresh start by removing or liquidating debts. Based on the Reform Acts means testing some debtors are presumed able to repay a part of their debts when their median income for their family size exceeds certain levels. The bankruptcy code was made to provide debt relief to those who have run into financial difficulties and either needs a fresh start or time to pay off their current debts. Debt relief is provided by the bankruptcy process but it does not come without strings. A bankruptcy filing will stay on your credit record for up to 10 years, as well, not all debts are qualified to be expunged through bankruptcy. You may be in need of debt relief but before you reject other options you should confer with a bankruptcy attorney your specific debts.

Chapter 13 bankruptcy is designed to allow you to catch up your past due payments that accumulated before the filing of your petition by repaying them over a 36 to 60 month period. At the same time, the debtor is restarted in their current obligations going forward and must remain current on those obligations to experience the continued protection of the bankruptcy automatic stay against foreclosure and repossession of secured collateral such as a home or a car.

The prospect of losing your job while facing unmanageable credit card debt can be a difficult and stressful time in one's life. Seeking debt relief through bankruptcy is legal; it is the best choice under difficult circumstances for many individuals and companies. Most likely, debt relief is the treatment of a "disease," and if the disease is not cured from the roots, any treatment would be useless. The organization would enter consultation with the lenders on behalf of the debtor and work out either a small per-month installment toward the complete liquidation of the loan or agree to allow one or two large installments as debt settlement.

Bankruptcy proceedings often contain complex legal issues that can be difficult and overwhelming to handle alone. It is essential that you seek knowledgeable counsel who will protect your legal rights and patiently handle your concerns. For more information about bankruptcy, visit http://www.onlinebkassist.com.

by: Steve

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