You Always Have Options…
What if you feel that your debt has gotten too out of control? What are your options for debt relief? Part 3 of our series will go into details of the bankruptcy process. This is also where our bankruptcy attorneys can assist.
Sometimes calling a creditor can help. If you have extenuating circumstances, some companies will work with you. Although this is a good place to start, this does not always work.
Another option that is available is Bankruptcy. There are 2 main types of consumer bankruptcies and those are the two that our firm handles.Chapter 7 is the more straight forward of the two and is often called “liquidation” bankruptcy. This is due to the fact that the bankruptcy trustees can sell or liquidate any non-exempt property in order to partially pay off any creditors. More often than not, Chapter 7 clients have very little to no property that is non-exempt so it will basically wipe any unsecured debt for the consumer.
Examples of debts that are not discharged are (but not limited to) student loans and secured debt (loans/debt tied to property if you are keeping the property). There are income requirements for this type of bankruptcy and you should speak with a Bankruptcy attorney about whether you qualify.
Chapter 13 is more like a payment plan that lasts 3 to 5 years and is set up by the courts to pay off a percentage of the unsecured debt that is owed. This is a bit more involved because it is based on your income and expenses for each month and the payment does not include secured debt (except for back-owed payments) so you still have to keep up with those payments outside of the payment plan. In some circumstances you can include your car payments inside the plan and take advantage of the 5.25% interest rate for vehicles. This is often for consumers that are behind on their secured debts and they want to keep the property or for the consumers that do not qualify for Chapter 7. Again, it is always best to speak with a bankruptcy attorney about what type is right for you.
Why file? A lot of consumers are afraid of Bankruptcy and their credit. Yes, it will remain on your credit for a number of years (10 years from the date of filing for Chapter 7 and 7 years for Chapter 13). But often, if you are in the position to file for Bankruptcy, your credit score is already at a low point.
Bankruptcy is often a fresh start and can actually in some situations raise your credit score. It allows consumers to begin again and they have the chance to become more educated in financial management. One of the requirements to file for a 7 or 13 is two credit management courses. This helps you to take a look at your current situation and learn how to manage your bills and credit better in the future.
Filing can be a scary thought but your Bankruptcy attorney is there to make the process as painless as possible. If you do file, be sure to pay attention to all the needed forms and documents. If any information is missing, your case could be drawn out or dismissed and that adds more stress to your situation. Remembering that you always have options should give you a sense to relief. Never feel cornered or hopeless because of your financial situation.
If we can help answer any questions you may have, please contact our office today for a FREE CONSULTATION with a bankruptcy attorney.
To Be Continued….
Lam Law Firm, LLC •1335 44th Ave North • Suite 100 • Myrtle Beach, SC 29577
DISCLAIMER: The information contained on this page is for general information, only. It is not intended to be legal advice, nor should you make legal decisions based on this information. Please consult one of our attorneys to see how the law applies to your particular situation.