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Is Bankruptcy Right for You?

Is Bankruptcy Right for You?
October 16, 2018

Is Bankruptcy Right for You?

When you are struggling financially, knowing what to do can be extremely hard. How do you know if bankruptcy is right for you? If it is, which kind of bankruptcy is the best option for you? There are two main types of bankruptcy for individuals, Chapter 7 and Chapter 13. Chapter 13 bankruptcy uses your income to make payments on the debts you owe over the next several years. Chapter 7 is where most, if not all, of the debts you owe are erased in a three to six-month process. With that said, what should you consider when deciding if bankruptcy is right for you?

Have You Considered Alternatives to Bankruptcy, and are You Eligible for Bankruptcy?

While your financial situation may seem grim, it may not be quite as bad as you think. There may be options available to help you which you are not even aware. You need to make sure that you are “judgment proof” by making sure you are eligible for bankruptcy. You may not qualify for Chapter 13 bankruptcy if your income is not high enough or your debts are too high. You may also not be able to file for Chapter 7 if you have enough income to repay your debts in a Chapter 13 bankruptcy.

  • Know that all debts can be canceled. Certain debts, such as child support, cannot be erased in a bankruptcy. An experienced bankruptcy attorney can advise you which obligations can be wiped out and which can not.
  • Consider your home. Bankruptcy will not make your mortgage go away, but it can get rid of your other debts, making it easier to pay your mortgage. If you have a lot of equity built up in your home, you may lose that equity if you file for a Chapter 7 bankruptcy. Chapter 13 bankruptcy will allow you to keep your home and pay any arrears through a repayment plan.
  • What about your car? If you file for Chapter 7 bankruptcy, you could lose your car. If you pledged the property as collateral for a debt, you could also be subjected to losing your vehicle.
  • Do you have credit card debt? Bankruptcy will likely wipe out all of your unsecured loans and credit card debt unless you lied on your credit applications or spent extravagantly.
  • Is your pension, 401(k), and IRA safe? You likely will not lose your pension, life insurance, or retirement accounts. Your bankruptcy lawyer can advise you if your assets will be protected during bankruptcy proceedings.
  • Will cosigners be stuck with your debt? If a relative or friend cosigned a loan agreement for you, they would be protected under your Chapter 13 bankruptcy. However, a Chapter 7 bankruptcy will stick them with any of the debt that you do not pay.

Bankruptcy can be invasive. You will have to disclose every single detail of your financial situation to the court, and other people will likely find out about your bankruptcy. You may lose property, or have to spend the next several years seeking approval to spend your money if you file a Chapter 13 bankruptcy.

Having a knowledgeable bankruptcy attorney who can explain all the details and help you understand which type of bankruptcy might be right for you is imperative. Contact the attorneys at Kevin M. Schmidt, Attorney at Law, and let them advise you what your best options may be. They have been handling bankruptcy for over 20 years and have the experience to give you peace of mind that you are doing what is best for your situation.

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At the Law Office of Kevin M. Schmidt, P.C., we offer a free consultation during which we will examine the facts of your case and advise you on how best to proceed

Our Phone Number219-756-0555
Contact via Emailinfo@kmslawoffice.net
Our Location200 E. 80th Place
Suite 110
Merrillville, IN 46410
Copyright 2018. All rights reserved | NUVEW
We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code. This website is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Testimonials are not a guarantee, warranty, or prediction of the outcome of your case.