When an individual is lagging behind in bill payments (A huge sum) with no foresee of getting it cleared off soon, it is best to get a fresh start by filing for bankruptcy legally. Filing for bankruptcy helps you get rid of all your unsecured debts and also stops all collection calls by giving you an automatic stay.
The individual who files for bankruptcy is known as the debtor. When you file for bankruptcy, you get-
- Discharge from most of your debts (exceptions are there)
- Prevent foreclosure on the property
- Buy time to catch up on your arrears
There are 2 chapters commonly under which most individuals file for bankruptcy.
- Chapter 7 – this is a simple and straight mode of getting rid of your debts. Under this chapter, when you file for bankruptcy, you can get rid of your debts by foreclosing or selling your property and asset (excluding the exempted ones) to pay off the dues of your creditors.
- Chapter 13 – Under this chapter, you, with the help of the court create a repayment plan wherein you will pay off all your arrears over a period of 3-5 years as finalized by the court.
Cost for filing for bankruptcy?
The fees for filing for bankruptcy vary from chapter to chapter. The fees are the same whether you file as an individual or a couple.
- Chapter 7 – $335
- Chapter 13 – $310
Under certain circumstances, you are even permitted to pay the fees in installments instead of paying them in full.
What assets and properties can I retain?
All properties against which you have got exemptions can be retained when you file for bankruptcy. The max exemptions that you can get are –
- $25150 for equity for your home
- $4000 equity for car
- $625 for household items. Max exemption of all combined goods can be $13400
- $2525 for tools required for the job
- $1700 for jewelry
The value can be considered as double if the filing party is a couple.
Will all my debts be wiped out if I file for bankruptcy?
When you file for bankruptcy, most of your debts get wiped out with an exception of –
- Domestic support obligation – this includes child support, alimony
- Criminal restitution and fines
- Taxes and debts incurred to pay the taxes
- A loan that you have taken by deceiving the creditor or providing false information
- Debts that have arisen due to wilful and malicious harm
- Student loan
- Debts incurred while drunk and driving injury
If you are planning to file for bankruptcy and are not certain about how to proceed, you can get in touch with the best in Dallas city. To book an appointment, log on to their website – https://www.recoverylawgroup.com/bankruptcy/ or call them on – 888-297-6203