How bankruptcy works
After an individual qualifies and files a bankruptcy, the court protects the filer as they fix their financial situation, and get their life back on track through these legal protections. Title 11 of the United States Bankruptcy Code offers various forms or chapters of relief. Chapter 7 (known as the Bankruptcy Reform Act) and Chapter 13 are the chapters most commonly used by consumers.
Chapter 7 Bankruptcy is for persons wishing to be free from debt who cannot afford to pay back a significant portion of their unsecured debt.
If you are facing foreclosure, bankruptcy might be able to help. In many cases, filing Chapter 7 bankruptcy can delay the foreclosure by a number of months.
Chapter 13 Bankruptcy is for those who wish and can afford to pay a portion of their unsecured debt back.
Some people may be able to save their home by filing for Chapter 13 bankruptcy.
Impact of filing for bankruptcy
Creditor harassment ended – Once a Bankruptcy Petition is filed, an “automatic stay” protection is in place and works to prohibit creditors from calling, billing, threatening, suing, or taking any measures to collect from you!
Relief from unsecured debt – Relieves you from unsecured debt that you are unable to pay such as medical bills, credit cards, business debts, bank loans, overdraft charges, and utility bills. Be aware that not all unsecured debt is dischargeable.
Catch up on Mortgage and Car payments – After you file a Bankruptcy Petition, even secured creditors must get court permission to repossess your car or foreclose on your home.
An individual contemplating bankruptcy should seek out as much information as possible as the process is complex and will have a major impact on your life. Bankruptcy for many people is the best answer, and can provide immediate relief both personally and financially. There are Bankruptcy Laws designed to help you. Seek professional advice from bankruptcy attorneys and bankruptcy lawyers will help.