Unfortunately, there are many people whose financial situation has deteriorated so badly, they are now considering having to file for bankruptcy. As if like wasn't challenging enough, these same people must now go through a painful and confusing court proceeding to actually file. Therefore, this article is going to cover a few bankruptcy basics, as well as why you should use a lawyer when filing for bankruptcy.
At this point, any reasonable person would think it is ridiculous that they must hire a lawyer to file for bankruptcy. If you don't have money to pay your bills, how in the world are you going to pay a lawyer?
However, because of the recent bankruptcy rule changes, you are required to use a lawyer during the bankruptcy process. Even though it doesn't seem fair, the law is very specific in this regard.
Now that we have established that you must use a lawyer, it is important to understand that there are 2 main chapters of bankruptcy that you can file under. These two types are Chapter 7 bankruptcy and Chapter 13 bankruptcy.
The first type, Chapter 7 bankruptcy is where you are forced to sell your assets in order to pay your creditors. Once you have sold your assets, any remaining debts are discharged by the courts. This procedure normally takes between 3- 6 months to execute.
Chapter 13 bankruptcy is where the court carefully reviews your financial situation and then sets up a repayment plan to pay off your creditors. This repayment plan usually last for three years. If you stick to the repayment plan, any remaining debts are then discharged by the courts.
For many people, bankruptcy seems to be the cure all for their financial situation. However, bankruptcy can not discharge either taxes or student loans. Therefore, we recommend that you very carefully consider the impact of student loans on your life. If you borrow money, you will have to repay it.
As we have shown above, bankruptcy can be a good last resort. However, before you pursue this option, we recommend you consult a reputable credit counseling service (stay away from debt consolidation services). If you find that you must declare bankruptcy, you should try to find the best lawyer that you can. - 31380
At this point, any reasonable person would think it is ridiculous that they must hire a lawyer to file for bankruptcy. If you don't have money to pay your bills, how in the world are you going to pay a lawyer?
However, because of the recent bankruptcy rule changes, you are required to use a lawyer during the bankruptcy process. Even though it doesn't seem fair, the law is very specific in this regard.
Now that we have established that you must use a lawyer, it is important to understand that there are 2 main chapters of bankruptcy that you can file under. These two types are Chapter 7 bankruptcy and Chapter 13 bankruptcy.
The first type, Chapter 7 bankruptcy is where you are forced to sell your assets in order to pay your creditors. Once you have sold your assets, any remaining debts are discharged by the courts. This procedure normally takes between 3- 6 months to execute.
Chapter 13 bankruptcy is where the court carefully reviews your financial situation and then sets up a repayment plan to pay off your creditors. This repayment plan usually last for three years. If you stick to the repayment plan, any remaining debts are then discharged by the courts.
For many people, bankruptcy seems to be the cure all for their financial situation. However, bankruptcy can not discharge either taxes or student loans. Therefore, we recommend that you very carefully consider the impact of student loans on your life. If you borrow money, you will have to repay it.
As we have shown above, bankruptcy can be a good last resort. However, before you pursue this option, we recommend you consult a reputable credit counseling service (stay away from debt consolidation services). If you find that you must declare bankruptcy, you should try to find the best lawyer that you can. - 31380
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