Whether or not to file for bankruptcy is a question that many people wrestle with, and a self-imposed inquiry that is certainly not taken lightly.
After all, a bankruptcy filing is an undeniably big step and a move that is attendant with material consequences.
Gat an experienced lawyer. For persons contemplating bankruptcy, that is advice that is centrally delivered in a recent media article on the subject.
The reasons why are many. For starters, it is imperative for any person considering this step to determine what type of bankruptcy filing makes the most sense.
Proven legal counsel can help with that by explaining the contours of and differences between a Chapter 7 bankruptcy and a Chapter 13 filing, the most common types of bankruptcy processes engaged in by individual consumers.
With Chapter 7, the so-called “liquidation” bankruptcy,” a close examination of assets and liabilities will need to be undertaken. A key feature of Chapter 7 is focused upon the discharge of certain types of debt deemed non-secured, and it is vitally important for a debtor to fully understand what this means.
In other words: Certain property does not qualify as exempt from creditors’ reach and will be susceptible of liquidation in order to satisfy debt obligations. Conversely, other debt obligations are exempt -- commonly unsecured debt such as credit card obligations and medical bills -- and can be discharged through bankruptcy.
Another feature -- highly valued -- of bankruptcy is the automatic stay that puts creditors on hold once bankruptcy is filed. An experienced debt-relief attorney can also explain that tool and how it works on behalf of a pressured consumer.
Source: Michigan State University Extension, "Should you file bankruptcy? Part 3," William Hendrian, July 3, 2014