Personal Bankruptcy Could Help You Recover In These Uncertain Times
Many people are running into financial problems they never expected. Everywhere in America, including Michigan, people are facing financial concerns related to our struggling economy.
It could be a job loss, excessive medical bills, credit card debt or COVID-19-related issues. If you are experiencing financial distress, no matter the cause, contact the bankruptcy attorneys at Schwartz Law Firm.
The bankruptcy process can be overwhelming and stressful. Understanding Chapter 7 and Chapter 13 bankruptcy can go a long way to easing your mind as you take the first steps toward debt relief.
Chapter 7 Offers Many Families A Fresh Start
Chapter 7 is also known as liquidation bankruptcy. In this process, the court will appoint a trustee who can cancel your unsecured debts or sell your assets to pay debts. However, most people who file for Chapter 7 do not need to sell off any of their existing assets.
The process includes these steps:
- File a petition with Bankruptcy Court.
- Complete the bankruptcy means test. This will determine if you meet requirements to file for Chapter 7.
- File documents with the court.
- Get credit counseling within six months of filing.
- The trustee determines whether any of your assets must be sold to pay debtors.
Once you file, creditors must stop harassing phone calls, wage garnishment and lawsuits.
Chapter 13 Lets You Set Up A Repayment Plan
There is another option if you do not meet Chapter 7 requirements under the means test. Chapter 13 (a wage earner’s plan) allows you to arrange a repayment plan with your creditors.
Under Chapter 13, you repay delinquent debts over a three- to five-year period. You are not at risk of losing any assets.
Will Bankruptcy Ruin Your Credit Score?
Your credit score will initially take a hit. You should consider bankruptcy as your opportunity to start over. The same is true for your credit score. You can rebuild it over time. Do not let this initial dip deter you from taking control of your financial future.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.