Chapter 13 and Chapter 7 are the two most commonly filed bankruptcy chapters. If you are someone who is considering declaring bankruptcy, is it important that you have the guidance of a bankruptcy attorney to ensure you are applying for the correct chapter. Your current financial situation and whether or not you are willing to sell off some assets will determine if declaring Chapter 13 or 7 is in your best interest.
What are the reasons why people file for Chapter 7 bankruptcy?
Some of the most prevalent reasons why people file for bankruptcy are due to substantial medical bills, unemployment, overextended credit, and marital issues. Chapter 7 may also be referred to by your attorney as “straight bankruptcy,” which entails liquidating some assets in order to pay off as large of a chunk of your debts as possible. The cash that you make from selling assets are then transferred to creditors, such as banks, credit card agencies, and student loan companies.
How long after filing for Chapter 7 bankruptcy will I hear back?
Usually within four months you will be notified about your bankruptcy filing and discharges. A bankruptcy status will remain on your credit report for ten years. While that sounds like a long time, it doesn’t mean that your credit score is ruined for life. There are plenty of ways to get that score back up despite taking a temporary hit after filing for bankruptcy. For a large number of people, Chapter 7 provides the fresh start that they need.
What if I don’t want to sell my assets or property?
Despite the potential benefits, filing for Chapter 7 may not be in the best interest of every person. For instance, if you are someone who would prefer to keep your assets instead of paying them off in order to satisfy creditors, then you may want to consider Chapter 13 bankruptcy instead.
What does Chapter 13 entail?
Much to the relief of those who find the idea of selling their assets excruciating, Chapter 13 could be the right chapter for you. Chapter 13 is more appropriate for people who want to keep their property, such as cars, real estate, and other assets. Chapter 13 doesn’t entail selling any of your belongings; instead, you will be required to create a 3-5 year repayment plan. Then once that term is over, the rest of your debts are discharged.
Will creditors stop contacting me after filing for bankruptcy?
Yes, regardless of what chapter you file for, creditors must stop contacting you once an “automatic stay” is set forth. If you do hear from any creditors after receiving notice of your bankruptcy status, you need to notify a skilled bankruptcy lawyer, like an affordable bankruptcy lawyer Las Vegas, NV, so certain steps can be taken. Debtors are protected under the automatic stay from phone calls, emails, letters, and any other form of communication by creditors. If a creditor violates this automatic stay, they can be held accountable through legal action.
Thanks to Ballstaedt Law Firm for their insight into what type of bankruptcy you might need to file for.