What if it’s time to consider bankruptcy? Put aside the initial fear or shame that comes with considering this option because that’s not what it’s about. It’s about creating a fresh start that resolves any disputes or debts from before it. That doesn’t mean it will be easy, but it will be doable, and it won’t be forever.
There are different types of bankruptcy that suit various situations in which debtors may find themselves. Chapter 7, often called liquidation or a straight bankruptcy, allows people to resolve debts with the help of a trustee who catalogs and sells off most of their remaining assets.
Chapter 13, also called a payment plan or a wage earner’s bankruptcy, allows people with predictable sources of income to keep many of their assets if they can pay down their consolidated debts within three to five years. Chapter 7 is often an option for people who cannot manage to predict their financial future.
Bankruptcies begin with a petition in the appropriate court. The debtor’s assets and liabilities must be listed in this petition. Other than some court proceedings, any creditors pursuing repayment of debts must wait until the bankruptcy is considered before taking further steps.
People considering a Chapter 7 bankruptcy are always allowed to have a lawyer handle filings and represent their interests while a petition is considered by the court. An attorney may make a filing more likely to be successful in the first application and the first form of bankruptcy. No one should have to deal with the consequences of debt without help.