Bankruptcy To Be Continued!

Are you facing financial stress because of your debts? Not sure what to do? Don't worry! We will try to clear all your doubts here.

Bankruptcy is a life-changing procedure. It is crucial to know the complexities involved with the process. There are several reasons which may cause financial difficulties, and the ongoing pandemic has worsened the situation. If you are someone who is hounded by debt collectors then you may consider filing for bankruptcy. It is, however, subject to certain criteria that need to be met before you are eligible. Let’s know some crucial details regarding the bankruptcy process.

Bankruptcy And Your Debts

If you are experiencing severe financial problems because of debt and there is no way out, filing for bankruptcy can prove to be a good solution. First of all, it stops all the telephone calls from debt collectors, creditors and sometimes assists you against lawsuits. Filing for bankruptcy may also eliminate some debts such as credit card bills, medical expense bills, unsecured personal loans, and more.

Debts such as student loans, child support, tax debt, and alimony payments are not dischargeable under bankruptcy. But your unsecured credit card debt, personal loans, utility payments, and medical bills can be wiped out. It can also help you eliminate debt such as a mortgage, car loan, or other secured loans but you will lose all the assets. To read out more about what is secured and unsecured debts, click here.

The two main types of bankruptcy procedures

Chapter 7 : 

Chapter 7 bankruptcy process is mainly for low-income groups, and hence you cannot keep the property if you are running behind on payments or have defaulted. But this can also vary according to the situation, if you want to know the details, read the Advantages and Disadvantages of Chapter 7 Bankruptcy.

Chapter 13 :

If you have significant income to cover some part of the payment then Chapter 13 bankruptcy may be your best bet. It will let you keep your property and take advantage of the chapter 13 bankruptcy process.

Filing Bankruptcy Requires Full Honesty

The first thing your bankruptcy lawyer would tell you is to be brutally honest when filing for bankruptcy. You would have heard the common saying - “honesty is the best policy". It holds for the bankruptcy process as well. It will help you get a fresh start. You should disclose all the factual details to your lawyer, not doing so would only cause unnecessary problems later on.

Bankruptcy requires full disclosure. 

All your Debts - Give all the details about your debts, secured or unsecured. Even if you have taken debt from your friends or acquaintances, you should furnish those details to your lawyer. One of the mistakes people make while filing bankruptcy is not giving all the details, it only causes trouble later on. Recollect everything about your debts, be it credit cards, personal loans, medical expenses, business-related loans, car loans, or any other.

Your income - It is equally important to give correct figures about your income. It includes any passive income from other sources or a large sum of the amount you may have received by selling any asset. Or any benefits that you may be entitled to. Give all the factual details to your lawyer.

Assets - It includes your property, jewelry, furniture, cars, or any other belongings. All of this would help the lawyer assess your case and suggest which bankruptcy would best suit your particular case. He will also explore the possibilities of keeping your property while solving your debt problems if there is any possibility whatsoever. 

Final Word - The purpose of bankruptcy is to help those who are indebted. Bankruptcy can not only help make peace with creditors but also move ahead in life. It can only be achieved when you are honest throughout the bankruptcy process. It is always advisable to share all the details with your lawyer. Failing which, there could be serious implications and you may be denied a discharge.