The United States government provides a means for people who have too much debt to obtain a new start by eliminating the heavy debt burden. A bankruptcy is not intended to be an easy way to eliminate debt. It is meant to be a way to once again live a normal life without the stress of unsolvable financial problems. When you have too much debt and little hope of being able to reduce the debt without help, filing bankruptcy may be the best alternative.
People can find themselves saddled with heavy debt for a million different reasons. Common reasons for finding yourself with spiraling debt are having too many credit cards with high interest rates, loss of employment, major hospital bills and living beyond your means. Having to file bankruptcy doesn’t mean you are financially irresponsible. It only means that circumstances have led to unmanageable debt.
It can be thoroughly miserable to be drowning in debt. You learn to fear getting the mail out of the mailbox because of the constant bills. The collection calls are stressful and constant. No matter how much you pay on high interest credit cards the interest keeps the balance growing. Your credit gets ruined, and there seems to be no hope.
The purpose of filing bankruptcy is to start over again by eliminating or reducing the debt you owe. The primary purpose is to give you a chance to begin again with a clean slate. It is impossible to live a normal life when debt is uncontrollable. The one thing bankruptcy is not intended to do though is help you evade debt you are capable of paying.
Because bankruptcy is not intended to avoid paying debt you can afford, certain monies and properties will be distributed to creditors according to a method determined fair by the United States Bankruptcy Court. The court will determine what assets you can keep and which must be sold for debt settlement. You may also have to pay some of your debt with money on hand if you have more than a designated amount.
There are several types of bankruptcies called chapters. The chapters are intended to address the fact that there are certain circumstances which vary enough to justify different treatments. Most individuals file chapter 7 or chapter 13 bankruptcies.
The chapter 7 bankruptcy is called a “straight bankruptcy” in which all debt is written off that cannot be settled with asset sales. The chapter 13 bankruptcy reorganizes your debt payments into an affordable repayment plan. In both cases the creditor calls are stopped, and you can begin to live a normal life again. In fact, once you notify the court you are asking for bankruptcy protection, all of the stressful collection efforts stop. These include lawsuits, foreclosures, evictions, debt collectors and even repossessions. You get almost immediate relief.
There are other bankruptcy chapters including chapter 11 for corporations and chapter 12 for farmers. These chapters are specifically used to eliminate particular types of debt such as non-consumer debt and farm related debt.
Filing bankruptcy is serious business, and it is also complicated. So you should always consult an attorney specializing in bankruptcies.
A bankruptcy lawyer can restore your faith in the legal system, because he or she can prove that the laws are there to help you in your hour of need. Sometimes it is easy to view the legal system as too bogged down with backlogged cases making it inaccessible to the average citizen. But the bankruptcy court is there to legally assist the honest person with debt that has become such a burden that it is virtually non-payable. For this situation, only the law can help.
When you need to hire a bankruptcy attorney, you should look for certain qualities. One of the most important qualities is experience. The bankruptcy attorney is a specialist just like the divorce lawyer or the criminal lawyer. The bankruptcy laws are complicated and only an attorney with experience is going to be familiar with the actual implementation and interpretation of the law. This can be crucial when it comes time to negotiate with the court trustee or the federal judge.
A bankruptcy lawyer should also have experience with all of the chapters as defined by law. When you consult with the attorney initially, you will have to complete a number of forms which detail your financial status. The attorney must interpret the information in relationship to the law and decide the best chapter filing for your particular situation. The only way this can be accomplished efficiently and accurately is if the attorney understands the complex legal definitions and requirements of all the personal and business chapter bankruptcies.
Of course, you also want an attorney who works efficiently and follows through. Everyone has heard of attorneys who take their time filing court papers and are bad at staying in touch with their clients. Filing bankruptcy is stressful enough without having an attorney in which you have little confidence. Instead, you want an attorney who is prompt with court filings and in whom you are able to confide. Admitting you have lost control of your debt can be a very difficult situation, and you need an attorney who understands the emotional side of bankruptcy.
A professional bankruptcy attorney is able to review your situation from many angles. In some cases, you may not need to file bankruptcy. Instead you might be able to actually avoid bankruptcy by lowering your debt and increasing your income in various ways. A good attorney will review all options with you and not just assume you have to file bankruptcy.
A bankruptcy attorney is a legal advisor, listener, confidante and advisor all rolled into one person. You want to hire an attorney with a good reputation. This may sound like a lot to ask of a single lawyer, but you want assurance that your bankruptcy will solve the major financial issues in your life. The only way to get this assurance is by retaining an experienced attorney specializing in bankruptcies.
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