Let’s face it: your finances are leading you down the road in a spiral of debt. You can’t seem to make heads or tails of your debt. Your payments are past due and late fees keep making your debt even worse. And when it comes to paying off your debts? Unless you win the lottery you could be making minimum payments for the rest of your life. If you’ve been considering personal bankruptcy, it’s best to know what your options are.
Before you make the appointment with your personal bankruptcy lawyer, take a look at our article on how to examine your best personal bankruptcy options:
Know Your Types of Personal Bankruptcy
Knowing which type of personal bankruptcy you should file for can make all the difference in a successful bankruptcy petition.
Let’s examine the definitions behind the major types of personal bankruptcy now:
- A Chapter 7 bankruptcy is among the most common; in fact, almost 75% of all bankruptcies are Chapter 7 bankruptcies. This bankruptcy is best if you’re drowning in a sea of credit card and medical debts , as a Chapter 7 can completely wipe them out and give you a fresh new financial slate. However, while Chapter 7 allows you to eliminate most debts, if you have nonexempt property it can be liquidated to help pay off your creditors. If you are worried that your home or car will be included in these liquidated assets, check with your bankruptcy attorney, there are federal exemptions that typically allow you to retain such items.
- A Chapter 13 bankruptcy is a type of personal bankruptcy where the debts are repackaged. While you may need to pay back some of your debts, the point of this bankruptcy is that the amount of debt you owe may be reduced and have more affordable payments. Additionally, since you are reaffirming most of your debt you may be allowed to keep some assets that would be lost in a Chapter 7 bankruptcy. These cases can be complicated, so be sure to work with a highly qualified bankruptcy attorney .
Talk to a Bankruptcy Attorney
If you’re still not sure which type of personal bankruptcy is right for you, contact a bankruptcy attorney today to talk about your options. He or she will be able to look at your liabilities and assets, and recommend which bankruptcy you should file for.
Don’t wait for your finances to overwhelm you without checking to see if bankruptcy can provide the relief you need.