If you have medical fees, are late on bills, have recently lost your job or have maxed out credit cards, then you could be facing serious debt. Debt collectors will try to reach out to collect on your financial obligations. However, you may not have the money to pay off your debts. You may need to consider filing for bankruptcy.
Bankruptcy helps people with overwhelming debt find financial relief. There are two popular forms of individual bankruptcy: Chapter 7 and Chapter 13 bankruptcy. To learn about the differences, you can read the following:
Who should file for Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a form of debt relief for people with low incomes. If a filer’s income is below the means-tested limit, then their debts may be discharged within three to five months. In rare cases, a filer’s assets may be liquidated to pay creditors. However, many assets are exempt from the liquidation process, such as a main vehicle, a single home or personal assets.
Who is eligible for Chapter 13 bankruptcy?
Chapter 13 bankruptcy reorganizes a filer’s debts and creates a payment plan. The payment plan intends to allow the filer to pay their debts (or a portion of them) off over three to five years. After the repayment period is over, any remaining debts are resolved. Filing for Chapter 13 bankruptcy allows a filer to keep their assets.
Getting out of debt can be hard if it is causing you financial strain. If you are in debt and want to learn about your debt relief options, then you should consider reaching out for legal guidance.