On average, over a million people file for bankruptcy each year. The number fluctuates each year depending on the economy and other factors. It can also vary widely by state, but the truth is if you need to file for bankruptcy, you are not alone. Filing for bankruptcy might make you nervous. Knowing all you can about the process and what to expect beforehand can help calm your nerves and move forward. This article will explore the important aspects of bankruptcy and debunk some common bankruptcy myths so that you will be ready to discuss your bankruptcy with a bankruptcy attorney in Seattle, WA.
There are different kinds of bankruptcies. The 2 available for individual bankruptcy are Chapter 13 and Chapter 7. Your lawyer will discuss each of these options and let you know if you are eligible for both or just one. A Chapter 7 bankruptcy is what many people think of when they think of bankruptcy. However, it is harder to qualify for a Chapter 7 bankruptcy. In a Chapter 7, all your unsecured debts are wiped out. Unsecured debts might include your credit cards, medical bills, and other debts.
While most debts can be forgiven in a Chapter 7, some cannot. Alimony, child support, and student loans are just some examples of debts or obligations that cannot be wiped out in a Chapter 7. Chapter 7 bankruptcies are only available to people with little or no disposable income, and you generally have to get rid of any nonexempt property in order to pay what you can to your creditors. A trustee will oversee this process. If you make too much money, you may have to file for a Chapter 13 instead. A Chapter 13 bankruptcy reorganizes your debts so that you can more easily repay them. Interest rates may be lowered or dropped in order to facilitate the process.
While you will still owe your creditors, your repayment plan will be something you can handle based on your income. Chapter 13 bankruptcies generally allow you to keep your property, including your home, even if you are behind on your mortgage.
There are many myths surrounding bankruptcy. Here are some of the most common:
All your debts will be forgiven in a bankruptcy. As discussed above, this is not true. What debts are forgiven will depend on what Chapter you file for. Even in a Chapter 7 bankruptcy there will be debts and obligations you will still have to meet.
Your credit will be ruined forever. While filing for bankruptcy will significantly damage your credit, it does not guarantee that you will have low credit forever. If you are financially conservative and wise with your money, you can rebuild your credit in a matter of years.
You can file for bankruptcy any time you want to get out of debt. Bankruptcy might seem like an easy way out, but it is a complicated process. You have to prove that it is an undue hardship on you to repay your debts and that you aren’t able to make the required payments. There are also restrictions on how many times you can file for bankruptcy within a stated amount of time.
Everyone will know you filed for bankruptcy. Besides your creditors, the lawyers, and the court, most people will not know that you have filed for bankruptcy unless you choose to tell them.
While it is not necessary for you to have a bankruptcy lawyer, it will make the process much smoother, and it will be easier for you to get your bankruptcy approved. You should look for an experienced bankruptcy attorney in Seattle, WA, to handle your case.
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