Talk To A Bankruptcy Lawyer Before Making Costly Mistakes

The current economic recession has resulted in a significant increase in bankruptcy filings

. Job losses and the inability to find new jobs at equivalent salaries, among other issues, has forced many into having to make the difficult decision to file for bankruptcy relief. Bankruptcy can help those who are experiencing the financial inability to pay their bills to prevent foreclosures on their homes, repossessions of cars and other assets, and stop the harassment from creditors. It can legally allow for the discharge of unsecured debt or provide the opportunity for a restructuring of debt to enable affordable payment over an extended time.

There are consequences of filing for bankruptcy that must be considered. Bankruptcy will affect the credit score negatively for a period of years that can prevent qualification for loans, make it difficult to lease housing or get insurance, and can negatively affect one's career and job prospects. Before filing for bankruptcy, it is important to consult with a bankruptcy lawyer to be sure that there are no other avenues of relief and that you are making an informed decision. An experienced bankruptcy lawyer is well familiar with the laws and can advise you on the best course of action for your particular situation. An attorney can also assist you in avoiding bankruptcy as well, if there are alternatives.

There are essentially two different types of bankruptcy for individuals and couples: Chapter 7 and Chapter 13. Chapter 7 is the most commonly used by those who are overwhelmed with debt including credit cards, past due utility and medical debt, foreclosures and repossessions, and other debt. If qualified by meeting the standards of a means test or income below a certain level, unsecured debt can be discharged, or forgiven. Certain debts will not be discharged such as child support and student loans. Most are able to keep their homes, cars, and other property as long as payments stay current.

Chapter 13 bankruptcy allows individuals to reduce and reorganize debt to allow repayment over a period of time. It stops the foreclosure process and allows debt such as credit card debt to be paid at a reduced rate without interest. A monthly payment plan is arranged to allow the individual to pay over a period of three to five years to get caught up on the mortgage, tax debt, student loans, etc.

Though one can successfully file for bankruptcy without the assistance of a bankruptcy attorney, it is not a recommended approach. Errors can be expensive and cannot be corrected once the filing is complete. Talk to an attorney about your options before making any decisions.

by: Art Gib

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