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Bankruptcy Blog 2012 September Common Questions About Bankruptcy
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Common Questions About Bankruptcy

Posted By Price Law Group || 21-Sep-2012

Dealing with debt can be a scary situation to be stuck in. One purchase on the credit card here, another loan taken out there, and before you know it the creditors won’t stop calling you asking for the money you owed last year. Debt just takes a few poor decisions to start off, and then a person can get buried so deep there is no way out. Another common cause of debt is medical bills, or the loss of employment; many times there are situations that were completely out of a person’s hands and it left them with more money to pay off than they could imagine.

Is this you? Have you been dragged into the pits of debt and feel as though there is no way to climb out? You are not alone; many people for a variety of reasons have to deal with debt at some point in their life. The next step is admitting something needs to be done, and then taking action. Whether this is filing for bankruptcy or another form of debt repayment, something must be done in order to start over. Those who are considering the possibility of bankruptcy often have a lot of questions; here are a few common concerns people have about bankruptcy.

What should I do before filing for bankruptcy? Often time’s people will decide that bankruptcy isn’t the route for them and they will apply for a debt management plan that can be pricey. Unfortunately, many people who sing up for those programs end up going for bankruptcy after it is ineffective. Consider the pros and cons of bankruptcy, and discuss your unique situation with an experienced attorney who can guide you honestly through the best options for you. For some bankruptcy doesn’t have to be the option, by meeting with a skilled attorney they can point you to other smart options as well.

Will I lose my house and my cars if I file? This is a common fear among those who are dealing with debt, and often it can keep them from making the decision to file because they don’t understand fully the entirety of bankruptcy. Knowledge is key here, you want to understand thoroughly what you are getting into and what the costs and benefits are well. In most cases people will not lose their homes or car as long as there is still equity left in the property and it is considered to be exempt within your specific state. Under Chapter 13 bankruptcy, you would still be allowed to make payments to creditors in the event that your equity is nonexistent or nonexempt. When this happens, your creditors may decide to use that home or house as collateral, in the event that you don’t make those designated payments, the creditor would still be able to take away the home, even if you are under the bankruptcy protection.

Will I lose everything I own because of bankruptcy? This too is a common fear, filing for bankruptcy does not mean that you will be left with nothing; it is merely a step of action to fight to recover you and your family out of debt. Under the bankruptcy laws there are a lot of exemptions that cannot be taken away in order to help pay off your debt. These specific exemptions depend on your state of residence. An example would be a car within reasonable value, your clothes, food, devices necessary for medical care, etc. The goal of bankruptcy is not to deprive you of all comfort; it will just make things a little tighter than perhaps you are used to as means of riding yourself of debt.

Will bankruptcy rid me of EVERY debt? Sadly, no. There are certain exemptions which cannot be wiped out in the event of a person filing for bankruptcy. When a person files for Chapter 7 most of their debt will be erased such as credit cards, and all unsecured debts. The exemptions would be if you owe any money for child support or alimony after a divorce, the law requires that you still make those payments; there is no way out of that. College loans are not included in the exemption, nor are fines owed to the government, tax debt, debts not mentioned in your original bankruptcy filing, falsifying information to a creditor, debts because of causing malicious harm to another, or money owed after causing an accident due to a DUI. There are others, which is why it is vital you discuss every detail with your attorney, it can only help you in the long run.

What can bankruptcy do for me? While there are many bells and whistles when it comes to bankruptcy, it CAN do a lot for an individual who decides to take that route. Bankruptcy can wipe away almost all of your legal responsibility to pay back creditors for your debt, Chapter 7 allows the person to be discharged from most debt and start over again. Chapter 13 creates a debt consolidation for individuals, making the debt easier to pay off in a longer and more reasonable amount of time. Bankruptcy can help people avoid losing their home to foreclosure because of the many missed payments. It will also protect you from having your wages garnished down to a bare minimum by creditors. Creditor harassment can be extremely overwhelming for anyone in debt, and bankruptcy will prevent them from doing this.

If you or someone you know is considering the route of bankruptcy as a step towards debt recovery, contact Price Law Group today for more information about your situation! With years of experience we are ready to answer any of your questions and help you take that next leap! Call today!

Categories: Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

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