The economic situation all over the world is dire. This has resulted in many people undergoing severe financial stress. Business organizations, as well as individuals, are facing problems regarding huge debts which makes it difficult to remain afloat. Many people find it tough to manage debts incurred and mortgage payments. If you are facing a similar situation, it is time to consider bankruptcy.
Many people often have the wrong idea about bankruptcy, often because of the myths associated with it. Consulting adept bankruptcy lawyers such as those of Los Angeles based law firm Recovery Law Group can make you aware of the benefits of bankruptcy and how it can help you rebuild your credit. There are various chapters under which a debtor could file for bankruptcy, each with its own merits. Consulting a bankruptcy lawyer can help you with not only stopping wage garnishments, bank levies, and foreclosure but can also guide you on the best way to save assets, discharge your debts and rebuild your credit.
What Happens During Bankruptcy?
Despite many people being aware of bankruptcy as an option to get rid of financial problems, not many actually understand what happens during bankruptcy. While consulting with bankruptcy lawyers, you get to know about the different types of bankruptcies as well as the stipulated timeline associated with each one. Lawyers also make you aware of the benefits and repercussions of these different types, ultimately choosing one which best suits your personal case.
Opting for consultation with bankruptcy attorneys can also help you with:
- Determining the best course of action for your financial issues. You can either get your debts discharged via liquidation bankruptcy (Chapter 7) or reorganize them through repayment plans (Chapter 11 or Chapter 13)
- In case you opt for Chapter 7 bankruptcy to get your debts discharged, it is important to determine whether you qualify for the mean test which entails that your income must be below the state median. Apart from this, you also need to prove that you do not have the ability to repay the debts over a 3-5 year time frame.
- Determining which debts can be discharged. Not all debts can be cleared even after bankruptcy.
- Coming up with a repayment plan. In case you opt for the reorganisation of debts under Chapter 11 or Chapter 13 bankruptcy a repayment plan needs to be presented to the creditors.
As soon as debtors file for bankruptcy, automatic stay helps protect against various actions of creditors including threatening phone calls, wage garnishment, repossession, etc. If you too wish to get out of the vicious cycle of never-ending debts and threatening debt collectors; and want to make efforts to clear your debts, you need to consult bankruptcy lawyers to determine the best course of action.