Bankruptcy is a legal process that helps individuals and organizations eliminate their debts or repay them under the protection of a federal bankruptcy court. Deciding to file for bankruptcy is a very tough decision. You may feel overwhelmed when bankruptcy seems like the only option to your debt problems. It is important you think about the decision carefully because it can affect you for a long period. Additionally, it is important to note that bankruptcy does not eliminate all debts, and there are certain types of debts that cannot be discharged in bankruptcy. So, Is filing for bankruptcy best option for you? Here are some factors to consider.
Learn about the different types of bankruptcy
For individuals, there are two major types of bankruptcies, which include Chapter 7 and Chapter 13 bankruptcies. In a Chapter 7 bankruptcy, you can have most (or all) of your debts discharged. In addition, the court may sell or liquidate your property and then pay the creditors. However, you are allowed to keep assets that are exempt from sale under the federal law. A Chapter 13 bankruptcy is a good option for individuals with a regular income. Under this form of bankruptcy, you pay your debts off over the next three to five years, and you keep your property.
Determine what alternatives you have to apart from filing for bankruptcy
Try to determine if you can avoid bankruptcy on your own. For instance, you can consider figuring out ways to increase your income, reduce your expenses or lower your interest rates. Consult an experienced bankruptcy lawyer so that they can tell you what options you may have, and whether bankruptcy is the best option for you.
Ensure you are eligible for bankruptcy
You may not qualify for Chapter 13 bankruptcy if your income is too low, or your debts are too high. Additionally, you may be prevented from filing for Chapter 7 bankruptcy if you have enough income to repay your debts in a Chapter 13 plan.
So, Is filing for bankruptcy best option for you? With a good knowledge of the above factors, you will indeed make the right decision. Contact a qualified bankruptcy lawyer to help you evaluate your financial burden and provide the necessary legal support. For additional information about bankruptcy, and how you can hire a qualified bankruptcy attorney, go to.
