In the tough economic climate that we find ourselves in, many people, possibly more than ever, are having to make some seriously difficult financial decisions. With unemployment at all-time highs, and more and more people getting laid off or forced to take pay reductions, the question being asked by many families is, “How are we going to continue to pay all of our bills?” Well, the answer is simple: you can’t. I mean, let’s be honest here – if you can’t find work or if you’ve been forced to live on less, you can’t be expected to keep up with your bills. So, what should you do? Well, that’s something that you need to figure out for yourself, but one option is bankruptcy. Bankruptcy is much easier than some people imagine, but you need to seek the help of a lawyer.
If bankruptcy is within what you are willing to consider, then you need to know what your options are. Now, there are a number of different types of bankruptcies depending on whether you are filing bankruptcy as a business or whether you are filing personal bankruptcy. Assuming you are filing personal bankruptcy, here are the two main ones that you have to choose from:
Chapter 7 Bankruptcy
If you are drowning in unsecured debt like credit card debt, personal loans, medical bills, etc., then this form of bankruptcy might be a better fit for you. With Chapter 7 bankruptcy, your unsecured debt is eliminated allowing you a fresh start. This is why this form of bankruptcy is often called a “fresh start bankruptcy.”
Chapter 13 Bankruptcy
While Chapter 7 bankruptcies attempt to wipe out your debt, Chapter 13 bankruptcies act more like a debt consolidation program. With the exception of student loans, what makes this form of bankruptcy nice is that you get to pay your unsecured debts down without accruing interest. Once this form of bankruptcy is finalized, you are set up with a payment plan for a set number of months. You then begin to make payments to a trustee who will pass those payments on to your creditors.
So, now that you know the two most common types of bankruptcy all you need to do now is go out and find yourself a lawyer, and that should be the easy part. There certainly is not a shortage of bankruptcy lawyers. Be picky and make sure that all your questions get answered before signing on the dotted line.
Brandon Jones enjoys writing about bankruptcy lawyers in the los angeles area.