Considering the difficult economic climate these days, people from all walks of life are contemplating bankruptcy as a viable option. The most common forms of bankruptcy that most people consider are Chapter 7 and Chapter 13 bankruptcy. In a nutshell, a Chapter 7 bankruptcy is where the debtor can discharge all unsecured debts like credit cards, payday or personal loans, and medical bills. Any non-exempt property can be sold to pay off the debts, but this rarely happens if the debtor uses careful planning and hires an experienced bankruptcy attorney. The debtor can emerge from a Chapter 7 bankruptcy virtually debt free. On the other hand, a Chapter 13 is basically a repayment plan where the debtor pays the creditors back over a structured time frame of 3 to 5 years. This is ideal for the debtor that makes too much money to qualify for a Chapter 7 or has property that they want to keep such as a home.
Filing bankruptcy also offers the all powerful legal tool called an automatic stay. This is where all creditors are prohibited from any and all contact to the debtor during the bankruptcy. This is a huge benefit for the stressed out debtor who may have endured months of abuse from extremely aggressive debt collectors.
So why does filing bankruptcy carry so many negative stigmas that delay or deter so many from actually filing? Many of the reasons have to do with a lot of bad or false information floating around out there. Here are some just to name a few of the most common.
Creditors- The creditors are not your friends. They will tell you that if you don't pay them you will be put in jail. They will tell you that you will never get credit again after you file or that you will never be able to get a mortgage and own a home. This is simply not true. The US no longer has debtor's prisons and after you receive your discharge many start receiving offers for credit cards within months. If you are diligent and pay your bills on time you will find that within a few years you will be able to purchase a car or a home as well. Creditors will say anything to scare debtors into paying them.
Bad information on the internet- Many people searching for answers turn to the internet. This is certainly a powerful tool to gain information. However, people must beware when searching for information that they turn to reputable sites for answers. The internet has a lot of bad information as well as accurate facts. The bottom line is, after your initial search, you should always follow up with an experienced bankruptcy attorney to ask any further questions and discuss your options.
Family and Friends- While family and friends can be a trusted source, they may not always know the truth themselves. You will hear stories of how someone they know had to file bankruptcy and had a horrible outcome and lost everything. This may not be the truth of the entire situation. Many people exaggerate and distort the facts even though you think they have your best interest at heart. Again, the bottom line is to consult with a bankruptcy attorney for clarification and to discuss your options. When it comes to the complexities of the bankruptcy laws, it is always a wise decision to speak with an expert for the best possible outcome.
0 comments:
Post a Comment