Hyde Park Bankruptcy Attorney
It doesn’t take much for debt to get out of control. Illness, job loss, divorce, or other unexpected crises can leave you struggling to pay bills and crushed under a mountain of debt. If this situation sounds familiar to you, it may be time to consider filing bankruptcy.
Bankruptcy can give you the fresh start you need. But is bankruptcy right for you? And is it better to file Chapter 7 or 13? Both methods of bankruptcy can provide you with a method of eliminating most or all of your debt. How do you know which one to file? An experienced Hyde Park bankruptcy attorney can answer your questions. We can also help you learn more about what options are available to you to get you out of debt. Contact Lorraine M. Greenberg & Associates today.
What Is Bankruptcy?
Bankruptcy is a legal process that can help you get back on your feet financially. Both individuals and businesses can take advantage of bankruptcy if they accrue more debt than they are able to handle on their own. The goal in most bankruptcies is to eliminate or restructure debt.
The two most common types of bankruptcy available individuals include:
- Chapter 7 Bankruptcy. This is the most common type of personal bankruptcy. It is also the quickest, generally taking between four and six months to complete. Chapter 7 allows you to eliminate eligible debt. In exchange, you may be required to sell some of your property to pay creditors. Qualifying debt includes things like personal loans, credit cards, and medical debt.
- Chapter 13 Bankruptcy. This is often used by people who do not qualify for Chapter 7 due to income or type of debt. It takes longer than Chapter 7. With Chapter 13, you will organize your debt into a three to five year repayment plan, and some of your qualifying debt may be eliminated at the end.
Is Bankruptcy Right for You?
There are several options for dealing with debt. Bankruptcy is one of them. It allows you to start over on a fresh financial foot while treating your creditors fairly. However, while starting over may sound appealing, it’s important to make the decision knowing exactly what you’re getting into.
For example, if you want to buy a car or house soon, or start a business in the near future, bankruptcy may not be for you. Your credit score will likely take a large hit when you file bankruptcy, which can make it difficult to borrow money. A Chapter 7 will stay on your credit report for 10 years, and a Chapter 13 will stay on it for seven years.
Bankruptcy may also not be right for you if your debt is the kind that it cannot address. Certain types of debt don’t qualify for discharge in bankruptcy. These includes taxes, child support, alimony, criminal fines, student loans, and more.
What if you have a lot of “non-exempt” property that you want to keep? Chapter 7 requires you to sell some non-exempt property to pay creditors. And while Chapter 13 may work for you, you may still lose some of that property. This property cannot be protected from liquidation, and often includes investments, cars, and homes. You should, however, be able to keep personal items like clothing and furniture as well as your pension.
If you’re unsure about whether or not bankruptcy is the best option for you, speak to a Hyde Park bankruptcy attorney. They can help you make that determination, as well as work with you to explore other debt relief options.
Chapter 7 is a good option for you if you have mostly exempt property and dischargeable debt. In order to qualify, you must pass the Means Test. This means that you cannot have an income that is enough to repay your debts.
Chapter 7 is also a good option if you don’t plan on being in debt for a while because you won’t be able to get another Chapter 7 discharge for eight years.
If you have a lot of non-dischargeable debt and non-exempt property, you should file for Chapter 13. You must also have reliable income that is enough to cover repayment of your debts through a three to five year plan. Once debt is restructured, you will be expected to maintain payments or go back to court to attempt to find a new solution.
Will Bankruptcy Stop Foreclosure or Repossession?
In most cases, filing a Chapter 7 or Chapter 13 bankruptcy will stop or delay the foreclosure or repossession process through the automatic stay that goes into effect. Additionally, creditors may not be able to contact you directly. Instead, they will have to attend a creditors’ meeting or call your attorney.
Contact a Hyde Park Bankruptcy Attorney Today
If you need relief from the stress of mounting debt, bankruptcy may be your way out. At Lorraine M. Greenberg & Associates, we are dedicated to helping good people who have found themselves in bad financial situations. Contact us today to learn how a Hyde Park bankruptcy attorney can help you.