Bankruptcy has lasting effects, and it should not be entered into lightly. Many factors should be considered when contemplating a bankruptcy filing. In this article, readers will learn about the most common bankruptcy types handled by a Bankruptcy Attorney in Huntersville NC, and they will also get tips on the successful filing.
Consumer Bankruptcy Types
The most common types of individual bankruptcy are Chapter 7 and Chapter 13. During Chapter 7, the filer can wipe out much of their debt within six months or less. However, they also risk losing their personal assets. In Chapter 13, the filer is required to adhere to an income-based repayment plan that details how they will pay down the debt over the next five years.
Consider Bankruptcy Alternatives
Bankruptcy isn’t right for every situation, and many needlessly file each year. Potential filers should gather their financial documents and contact us to speak to a Bankruptcy Attorney in Huntersville NC before deciding. It may be that the client does not need bankruptcy because they’re judgment proof, or that the person’s financial issues can easily be resolved.
Determine Eligibility
Consumer bankruptcy comes with certain requirements. For instance, one may not be eligible for Chapter 7 if their income is sufficient to stick to a Chapter 13 repayment plan. If the person’s income is low, or if they have high debt, they may not be eligible for Chapter 13 if they can’t prove that they’re capable of making required payments.
Consider the Outcome
Before filing for consumer bankruptcy, one should consider what may happen to their home. If the person is already having trouble making monthly mortgage payments, it may become simpler if other debts are discharged. However, if the client has sufficient equity, they may lose their home in Chapter 7. Those with sufficiently high incomes can get Chapter 13 and include the mortgage bill in the repayment plan.
Prepare for Invasion
No matter which type of bankruptcy a person pursues, they should know that the process is very intrusive. For bankruptcy to be successful, the filer has to show the court all aspects of their finances. Bankruptcies may become part of the public record, and in Chapter 7, some personal assets may be confiscated and sold to pay debts. During Chapter 13, the filer may have to ask for court approval on all discretionary spending while the repayment plan is in effect.
