Are creditors constantly calling? Are your debts exceeding your income by more than 50%? Do you feel like there is no way you will ever be able to get back on your feet? Well, luckily for you, there is a law for that.
Federal law allows any organization or individual to file for bankruptcy if they need legal relief from liabilities incurred. But filing for bankruptcy isn't as easy as it used to be. Back in the day, anyone in significant debt could simply file for bankruptcy, have the government cancel their debts, and then start over again with a fresh financial record after a few years. It was that simple.
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Of course, that was before people started abusing the system. So, the government had to change their policies a bit to protect those who truly needed bankruptcy assistance. Here is how bankruptcy now works.
After a claim is made, the petitioner's assets and liabilities are assessed. The type of bankruptcy they can file for is then determined based upon this process. Most people don't realize it, but there are several different types of bankruptcy for which you can file. The most common chapters are 7 and 13, though businesses usually end up in Chapter 11. Once the legal chapter is determined, a specific set of paperwork is started and the system kicks into gear.
Each chapter is a bit different, and those subtle differences are difficult to keep straight unless you have a bankruptcy lawyer you can ask. I do know, however, that not everyone will qualify for complete bankruptcy relief. Some will still have to pay part of their debt or simply set up a payment plan for outstanding liabilities. I also know that the bankruptcy stays on your record for a much longer period of time, making it difficult to buy a house, a car, or just about any big ticket item.
So in short, unless it's absolutely necessary, it isn't a good idea to file for bankruptcy. However, if it is your last resort, don't stress. Bankruptcy law is here to protect you.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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