For some, eliminating or repaying debt can seem like a daunting task; for others, it is a necessary step to clearing bad credit. Though the word is often times treated as taboo, bankruptcy should be neither feared nor brushed off as an option in order to accomplish this seemingly heavy burden. Consumers and businesses alike can file under the protection of the federal government. Typically, they can choose between two different processes: liquidation and reorganization. To liquidate is to have some of your property pay back a portion of the debt, whereas reorganization allows the debtor to keep their property but requires monthly payments to the creditors.
Keep in mind, however, that not all who file for bankruptcy qualify and not all debts can be forgiven. A reputable collection attorney may be able to help you find the most viable solution.
At first, it doesn’t seem too much of a problem. Your credit card debts are growing and you did miss one debt payment, but you can handle that. As the months go by, however, the debt only gets worse. Finally, you realize you can’t pay your debts at all and your credit line has gone down the tubes. Is it time to consider bankruptcy, and just what does that mean?
As an individual, you may file for a chapter 7 bankruptcy, so named for a chapter of the federal Bankruptcy Code. It is also called liquidation bankruptcy because it allows you to sell some of your property to pay your debts. This process will take about 3-6 months, although it will stay on your credit record for about 10 years.
There are other pros and cons to bankruptcy under Chapter 7. You can keep most of the possessions you own and the wages you earn as well as any property you are able to buy after you file for bankruptcy.
A Chapter 7 bankruptcy is one option for debtors who are overwhelmed by debt and cannot pay their bills without legal intervention. Although Chapter 7 is one of the most common forms of bankruptcy for individuals, it is not necessarily the best choice, and it has serious consequences. A debtor will want to consult with a bankruptcy lawyer prior to filing for any bankruptcy to ensure they are choosing the option best for their situation.
Chapter 7 Qualifications
A bankruptcy under Chapter 7 is open to any individual or business, although it is usually used by individuals. There are no debt limits or requirements based on solvency. There are, however, certain requirements related to the filing of previous bankruptcies, and the debtor is usually required to receive credit counseling prior to filing. A person will likely choose to file under Chapter 7 if they have limited income or no reliable means of repaying their current debt.
There are various types of attorneys, some of which practice solely in specific area of the law. Those people who find that they need help with bankruptcy, business law, contracts, real estate and other such situations might find themselves in need of an attorney to help them settle their debt assist them with collecting through debt collection service. Having a legal professional on your side can certainly improve your chances to settle debt.
Case Evaluation and Strategy Development
Whether you’re the creditor who’s looking to collect on a debt or the debtor who is looking for a way out of debt, debt attorneys can assist you. Perhaps the most valuable service that such attorneys provided is case evaluation and strategy development. The most difficult part of either collecting on a debt or getting out of it is knowing where to begin.