Bjerre Blum posted an update 4 months, 1 week ago
Filing for Chapter 7 bankruptcy wipes out a large amount of unsecured debt, such as credit card debt, payday loans, installment loans and medical bills. Secured debt, which essentially uses an item as collateral, can also be eliminated, but the person will lose that possession. Typically this means losing a house or a vehicle, or both. Filing for this type of bankruptcy leads to difficulty in some ways, but the freedom it can create is a huge relief.
what is chapter 13 bankruptcy of the first steps in preparing for bankruptcy is to make a list of all outstanding debt, both unsecured and secured. The list is given to the attorney, who explains whether any of the obligations cannot be included.
student loan consolidation companies are not allowed to be forgiven in a bankruptcy filing, for example.
Considering the Timing
The timing of the filing must be considered carefully. If the person has taken out a loan fairly recently, that amount will probably be excluded.
credit card debt relief watch carefully for fraudulent activity, so borrowing money and then filing for debt relief is viewed with skepticism. Another issue is whether the person expects to acquire some money through life insurance or an inheritance within the next six months. The court would probably require that money to be used to pay creditors.
Paying the Lawyer and Court Costs
Sometimes people are in such dire financial straits that they don’t have enough money to pay a lawyer to help them file. Financial experts generally advise against self-filing because the paperwork is complex, and it’s essential to complete everything correctly When filing Chapter 7. Although it may seem distasteful, the person may be able to borrow money from family or ask for a gift of money to pay the lawyer. There also is a court filing fee, but that can be paid in installments.
Fees for bankruptcy lawyers are generally very reasonable. The attorneys obviously know that they are assisting people who have serious financial struggles. These lawyers also provide free consultations so men and women can learn more about the process and about their options.
By the time a person is ready to file, he or she wants the process to be over with as soon as possible. The person is tired of creditors and collection agencies calling all day long and receiving threatening letters in the mail. Before contacting a lawyer, this individual might visit the debt phoenix for information about filing for bankruptcy and dealing with debt collectors.