5 Things Every Consumer Needs to Know About Bankruptcy

People from all walks of life can find themselves in incredible debt; however, they are unsure how bankruptcy law affects them or whether filing for bankruptcy is a viable option. This article shows consumers what they need to know about bankruptcy.

If you are facing incredible amounts of debt, dealing with unmanageable bills and collection calls, or you have been wondering whether you will ever be able to claw your way out of owing people money, you might be curious as to what your options are. For some consumers, bankruptcy is the answer. Although most people have heard of bankruptcy, not everyone understands exactly how it works. If you have been dealing with large amounts of debt and you are ready to get help in order to reclaim your life, there are five important things you should know about filing for bankruptcy.

1. There are different types of bankruptcy.

No two situations are completely alike, which is why it is important to consider your personal situation when considering which type of bankruptcy might work best for you. Chapter 7, for example, allows individuals, married couples, even businesses to eliminate most of their debt within a few months of filing, and keep the majority of their assets using Florida’s bankruptcy exemptions. It is considered the quickest and most straightforward type of bankruptcy, giving filers the best chance of obtaining a financial fresh start. Chapter 13, on the other hand, does not eliminate debt in the same way as Chapter 7. Instead, clients are required to restructure their debt and create a repayment plan that is better designed to fit an individual’s ability to pay.

2. Bankruptcy can give you the freedom to move forward.

For some consumers, debt has completely taken over their lives. Crippling debt can make it difficult to apply for a home loan, qualify for additional financing, even afford your monthly bills and daily living expenses. It can also affect your personal relationships, your happiness, your job prospects, even getting a good night’s sleep. For many individuals who are struggling with insurmountable debt, bankruptcy is the only option.

3. Bankruptcy is not for everyone.

The bankruptcy means test determines who can file for Chapter 7 bankruptcy. It takes into account your income, expenses and family size to determine whether you have enough disposable income to repay your debts. Depending on your circumstances, you may find that filing for bankruptcy is not the right option for you. Talking directly with your creditors, first and attempting to work out an affordable repayment plan is a good first step. However, it is important that you do not give the creditor your checking account or routing information over the phone. If you are unable to pay, tell the creditors that.

4. Declaring bankruptcy will affect you, but not forever.

Note that bankruptcy is designed to give you a fresh start; however, it does have some drawbacks. There are certain non-dischargeable debts that cannot be erased even when you file for bankruptcy. Additionally, the decision to file for bankruptcy will impact your credit score. However, there is life after bankruptcy. And rebuilding your credit score after bankruptcy can happen soon after you file.

5. An attorney can help.

If you are feeling lost, understand that the right lawyer can help you move forward. Meeting with an attorney is one of the most important steps you can take. The right lawyer will guide you through the bankruptcy process and let you know whether this is the right choice for you.

If you are ready to get your financial life back on track, it’s time to meet with an attorney who can help. Our firm has worked with over 15,000 Florida clients and we have seen firsthand how dramatically bankruptcy can help lift people from situations that seem impossible. Take back control of your finances and your life, and get the fresh start you deserve.