Bankruptcy: Evaluating Your Options

Bankruptcy Help
If you find yourself drowning financially— with too much of the month left following your last paycheck, large consumer or medical debts, harassment from collections agents or having your wages garnished at work— then bankruptcy may be an option you need to consider.The problem with bankruptcy however, is that there are a lot of different avenues and potential issues you should explore and it can become overwhelming.  Chapter 7 or Chapter 13? Who will represent me in court?  What will happen to my home, my car, my personal property? Do I even need to file bankruptcy, or can I work out a settlement or repayment plan with my creditors?
Before making any rash decisions (which are often based on emotion), you should take a deep breath, step back, and evaluate your particular situation objectively.

Am I Really Bankrupt? 

This may or may not be an easy question to answer.

Yes, you may have some large debts; but filing bankruptcy will obviously have serious impacts on your credit and your ability to borrow money now and for  several years.

A reputable bankruptcy attorney will help you look at your situation rationally and objectively and may be able to suggest options other than bankruptcy. These options may help relieve the financial pressure without the collateral damage bankruptcy brings.

Who Should Represent Me? 

Just like medical doctors, lawyers can be ”jack of all trades” or specialists. They can be part of a large firm (with hundreds of employees) or solo practitioners.

Finding the right attorney for you will largely be dependent upon your particular situation, your needs and goals, and the attention and amount of time you dedicate to the search. An individual with a single, enormous medical bill faces very different circumstances than one with multiple judgments, tax liabilities, and multiple types of creditors (i.e. secured debt, consumer debt, student loans, domestic support obligations).

Be sure to check out our other articles on choosing the right bankruptcy attorney. 

Which Type of Bankruptcy Should I File?

Your bankruptcy attorney will help you decide whether to file a Chapter 7 or Chapter 13 (or other) bankruptcy.  Each Chapter will offer different possibilities for handling the creditors in your case and should be based on the details of your particular situation.

In general terms, a Chapter 13 bankruptcy allows you to repay a portion of your total debt to some creditors, based on a repayment plan approved by the court. This type of filing offers the same protection from creditors as other Chapters, but could be used to save a home or other assets you wish to keep.

In contrast, a Chapter 7 bankruptcy is treated as a complete liquidation of any non-exempt assets. Funds recovered from such assets are used to pay off some of your creditors—usually for pennies on the dollar. This Chapter will eliminate basically all of your outstanding debt but can leave you with virtually nothing (you are allowed to keep some personal items, some cash and protect others types of interests in assets).

Make an Informed Decision 

No one wants to be in a financial mess. Emotions can run deep when individuals are struggling with bills, facing the loss of their homes or personal assets.

Remember, the decisions you will make (or fail to make) now will have long lasting consequences.  This is why it is vitally important that you make informed decisions based on facts not feelings. A good bankruptcy attorney has the knowledge and experience to help you make the right choices. For a free consultation contact our office at (305) 595-3115.

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