What is Bankruptcy?
The Definition of Bankruptcy
Bankruptcy is a federal court process that allows people to eliminate or reduce their debts.
Bankruptcy is designed to help you eliminate your debts via Chapter 7 or repay them over time via Chapter 13 bankruptcy. Ask a local bankruptcy lawyer if Chapter 7 or 13 could help you.
Bankruptcy is Designed to Eliminate Debt and Stop Repossession
Under the United States Bankruptcy Code, you are provided with different bankruptcy options when seeking to resolve your financial problems:
Chapter 7 bankruptcy may be more appropriate if you are seeking relief from credit cards, medical bills, payday loans or other overwhelming unsecured debts (debts that are not tied to an item or piece of property).
Chapter 13 bankruptcy may make more sense if you are looking to repay secured debts (debts that are tied to an item or piece of property, such as a car or home) over time with the goal of getting even on these payments while keeping these items that mean the most to you.
What Does It Mean If You File Bankruptcy?
If you file bankruptcy, you are essentially making a legal declaration that you are unable to pay your creditors.
After you file bankruptcy, an automatic stay is entered. This stay legally prohibits creditors from contacting you during your bankruptcy case.
The bankruptcy automatic stay also stops most repossession and foreclosure cases.
If you're facing car repossession or foreclosure on your house, or if you're just wondering how to file bankruptcy, fill out the above form to see if bankruptcy could help protect your property.
The Definition of the Bankruptcy Automatic Stay
As a court order, the automatic stay tells creditors you're "hands-off". Once you file bankruptcy and the automatic stay is entered, creditors cannot contact you about your debts.
If a creditor does contact you during your bankruptcy case, he or she is in violation of the automatic stay and you may be in line for a settlement. If this has happened, it's a good idea to contact a bankruptcy attorney.
The Golden Question – Is Bankruptcy Right for Me?
While we have provided an introduction to what bankruptcy may mean to you, a local bankruptcy lawyer can examine your finances and provide specific insight.
The two main personal bankruptcy options: Chapter 7 and 13 are unique. Ask a lawyer if you can file Chapter 7 (you must pass the Chapter 7 means test in order to file) or whether Chapter 13 bankruptcy is more appropriate for your circumstances.
Fill out the below free bankruptcy case evaluation form to connect with a bankruptcy lawyer today.
Good luck in your debt relief journey!