Posted by on May 13, 2015 in Bankruptcy | 0 comments

Considerations to Make When Filing for Bankruptcy

The recent financial crisis dealt a huge blow all over the United States. Across America, plenty of plenty of people are struggling with insurmountable debt. It’s an unfortunate reality that thousands of Americans are having a hard time meeting their financial obligations and regaining control of their credit scores. Thankfully, those stuck in such situations have the option to file for bankruptcy and be granted financial relief by the law.

When filing for bankruptcy, a business or individual makes a legal declaration that they are no longer able to meet financial obligations and repay the debts they have to creditors. Through the process of bankruptcy, the court can give a business or individual several benefits that can help them get back on their feet and work towards financial stability. Among these benefits include the discharging of unsecured debts, the restricting of the debt payment scheme, and the liquidation of some assets to help pay debts to the government. However, specific outcomes will depend on the type of bankruptcy that was filed for. The U.S. Bankruptcy Code allows people to file for a certain type of bankruptcy that best fits their situation and needs. As pointed out on the website of Gagnon, Peacock & Vereeke, P.C., two popular options are Chapter 7 and Chapter 13. The first option allows the applicant—if successful—to have their debts completely eliminated through the liquidation of their assets. Meanwhile, the second option gives the applicant the chance to have their debt reduced while protecting them from foreclosure or wage garnishment.

Going through the bankruptcy process also assures a business or individual protection from debtors or any action they take to cover unpaid debts. Anyone who files for bankruptcy are awarded by the court with something that’s called an “automatic stay”. This prevents debtors from making any sort of contact or action in attempts to urge debtors to meet their payments.

While it can definitely be a challenge, regaining control of finances and other similar obligations is not impossible. If you have been struggling with mounting debts and other financial difficulties, it might be time to contact an experienced bankruptcy lawyer and learn more about your legal options.

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