Bankruptcy presents a viable option to become debt free. It is an exceptional opportunity for consumers with high volumes of debt. They have the option to submit smaller payments and settle their debts amicably. The first step for filing a bankruptcy claim is to attend a credit-counseling course.
How to get started
You could consult an attorney about credit-counseling. The program you select must be approved by the state. A list of these programs is available through your attorney.
Gathering your Documents
To get relief through federal bankruptcy, an attorney must determine your eligibility. For Chapter 13, you must have an income higher than the county median. This includes all sources of income. You can list alimony, child support, and dividends from stocks as an income source.
Chapter 13 Bankruptcy
This mechanism allows you to utilize a structured repayment plan to settle your debts. You follow this plan for a period of three to five years. During this time, you have an automatic stay that prevents lenders from foreclosing or repossessing your property. However, these debts must be included in the claim. In most cases, the payments are garnished from your wages. You are also required to use any expendable income to pay bills that weren’t included in your claim. Any violation of the terms could result in a discharge of your case.
Chapter 7 Bankruptcy
This form of bankruptcy is liquidation. You sell all key properties to generate funds to pay off your debts. This process takes up to six months to complete. Like Chapter 13, you receive exempted values for the properties. A trustee manages this process to ensure that all proceeds that aren’t exempted are submitted to your creditors. To file, you need to provide deeds and titles to the court to complete liquidation.
You get relief through federal bankruptcy by filing an appropriate claim through court. Your attorney reviews your finances to determine which chapter is right for you, whether it’s Chapter 13 or Chapter 7. To schedule a free consultation, contact your preferred attorney now.
