Have you ever been overwhelmed by debt? Have you ever considered if bankruptcy was the next step in your financial recovery? There are numerous advantages and disadvantages that come with filing for bankruptcy. We will look into common myths that surround bankruptcy and when it may be the best option for you.
Bankruptcy is an arrangement in federal law that allows individuals and businesses to get a reprieve from their debts and to get a fresh financial beginning. This system allows honest individuals who have fallen on hard times to get on with their lives without the harassment that comes from creditors.
There are two common categories within bankruptcy law that can be declared: chapter 7 bankruptcy and chapter 13 bankruptcy. In the most basic terms chapter 7 bankruptcy liquidates non-exempt assets and the proceeds are used to pay off creditors. This is a solid option when there is a large amount of unsecured debt to be covered by a small income. Chapter 13 bankruptcy helps individuals and businesses to reorganize and adjust their debts while using a repayment plan to cover the outstanding debt. This is a good option for those debtors that have an income and want to avoid foreclosure and catch up on outstanding bills.
A major advantage of filing for bankruptcy is that creditors are on notice to stop trying to collect outstanding debts from you. This means that they no longer can call you, send you letters, file lawsuits, garnish wages or seize your assets.
A major disadvantage in declaring bankruptcy is the devastation it wreaks on your credit score. Another issue that arises in bankruptcy is that certain non-exempt assets can be sold and debts from mortgages, student loans, taxes, alimony and child support cannot be discharged.
There are many myths in bankruptcy. One myth is that by just stating you want to file bankruptcy you have declared bankruptcy. This is not true. For bankruptcy to be legal you must file the right paperwork, go to credit counseling and pay the fees. It all reality it is best that a bankruptcy attorney is hired to facilitate the process to avoid legal complications from arising with improperly filed paperwork.
Another common myth is that you can go to jail for owing money. This is untrue. It is not against the law to owe money no matter how aggressive the debt collector is. One myth is that by just stating you want to file bankruptcy you have declared bankruptcy. This is not true. For bankruptcy to be legal you must file the right paperwork, go to credit counseling and pay the fees. It all reality it is best that a bankruptcy attorney is hired to facilitate the process to avoid legal complications from arising with improperly filed paperwork.
Another common myth is that you can go to jail for owing money. This is untrue. It is not against the law to owe money no matter how aggressive the debt collector is. Yes, creditors can sue you or take you to court but they cannot send you to jail.
Consider filing for bankruptcy if you are unable to meet your financial obligations. If you have been work for an extended period of time, delinquent on your taxes, nearing foreclosure on your home, having your wages garnished or pending a law suit on delinquent bills it may be time to meet with a bankruptcy attorney to further look into the benefit bankruptcy may have for your financial future.
Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.