Filing for bankruptcy: more than one option
On behalf of The Rollins Law Firm posted in Personal Bankruptcy on Wednesday, June 4, 2014.
Perhaps you’re a Mississippi resident that, through no fault of your own, is simply underwater in debt and generally facing financial challenges that seem insurmountable to you.
Such a description is far from singular. In fact, millions of Americans are in similar straits, owing to a number of financial hits they have taken in recent years. We all know about the housing debacle, for example, pursuant to which shady and otherwise predatory lending practices exposed many people to great personal risks. Many home values were artificially hyped, which the so-called Great Recession of recent years exposed, resulting in high levels of foreclosures.
Job loss, too, has been endemic. Medical debt has staggered individuals and families across the country, with credit card outlays – in many instances, for basic life necessities – having a similar effect.
Filing for bankruptcy has been the response of many people to crushing debt loans, with that lawful and well spelled-out process providing significant relief and a fresh start for high numbers of families nationally.
For persons who are presently struggling with insuperable amounts of debt and considering bankruptcy, a logical question can arise, namely this: What type of bankruptcy makes the most sense in my case?
That is a centrally relevant question, since there are various types of bankruptcy options. Although many people have likely heard of Chapter 7 and Chapter 13, they might lack specific knowledge of what they provide for, as well as how they differ from each other.
Chapter 7 is often referred to as a liquidation bankruptcy, since it allows for the erasure of unsecured debt (such as medical bills and credit card exactions).
Not all individuals and families qualify for this type of bankruptcy. For those who don’t, Chapter 13 – commonly termed reorganization bankruptcy – is an alternative that allows for the repayment of some or all debt over a specified period, along with an automatic stay that keeps creditors at bay.
The type of bankruptcy that makes most sense in a given case will depend on a host of factors. An experienced bankruptcy attorney can discuss options and help fashion a plan that optimally promotes a client’s interests.
Source: Nolo.com, "What is the difference between Chapter 7 and Chapter 13 bankruptcy?" Baran Bulkat, undated