Most adult Americans carry some form of debt, the most common being home mortgage, credit cards and student loans. Provided income exceeds repayment fees all’s well and good.
Unfortunately, life can throw “curve balls” at even the most prudent borrower. Employees can be laid off with little or no notice, divorce resulting in a division of assets, legal fees and maintenance costs or contracts being cancelled for self-employed contractors all of which can have a devastating effect on finances and if there is no “nest egg” to crack open the future can look bleak and scary. On top of which there is the constant pressure from creditors that can be deeply unsettling.
Many people still believe that declaring bankruptcy carries a stigma of failure, lack of responsibility or even a degree of dishonesty…nothing could be further from the truth.
There are two primary formats for filing:
Chapter 7 is primarily for those on a limited income who may also have some non-exempt disposable assets. Once filed an order entitled the “automatic stay” puts an immediate stop to creditors pursuing you. In normal circumstances the debtor can be discharged in 3-4 months.
Chapter 13 is a reorganization plan for individuals, normally, with higher disposable income. A plan is set in place that an agreed percentage or even the whole amount of debt can be paid off. The normal time span would be 3-5 years after which the debtor will be discharged.
In some cases, there may be other options to consider but before you do anything consult your attorney who will be able to advise you on the best option for you.
Here at Barbara May Law, we are experts in financial issues. so, if you are concerned about debt contact us for a free consultation which could be your first step to a debt free future.