Credit card debt, student loan debt, mortgages, and car loans – in the United States, debt is a common occurrence. Unfortunately, debt often becomes overwhelming for both individuals and families, and making ends meet becomes a monthly battle. When this happens, bankruptcy becomes a viable option for eliminating debt and creating a clean start. Before you file for bankruptcy, however, it’s important to know all the facts. Here are a few important questions you should know the answers to before you file for bankruptcy.
What does bankruptcy do?
Bankruptcy is a legal process you can use to eliminate or reduce your debts. As a person with debts, you can initiate bankruptcy by contacting a bankruptcy attorney who will help you through the process.
What type of bankruptcy should I file?
As an individual (or family), there are two types of bankruptcy you can file: Chapter 7 and Chapter 13. The type of bankruptcy you file depends on the type of debts you have. Generally speaking, individuals with few assets should file for Chapter 7 bankruptcy and individuals with multiple, valuable assets should file for Chapter 13 bankruptcy. Chapter 7 works to eliminate debts by discharging them and turning over your assets. Chapter 13 bankruptcy eliminates debt by creating a plan for reduced repayment with your creditors.
Does bankruptcy stop creditors?
If you’re constantly receiving calls or letters from creditors, filing for bankruptcy is one way to eliminate those occurrences. Once you file for bankruptcy, notice is sent to all creditors and temporarily halts any actions creditors can take against you such as repossession, wage garnishment, and cutting off your utilities.
What penalties do I face for filing for bankruptcy?
There are no legal penalties for filing for bankruptcy. In the United States, debtors cannot go to prison and you will not face fines. It’s important to note, however, that bankruptcy does affect your credit and can impact your ability to make future purchases. Furthermore, although there are no penalties for filing for bankruptcy, penalties for bankruptcy fraud are severe and can greatly impact your future.
If I am married, does my spouse have to file for bankruptcy?
Not necessarily. If you and your spouse don’t have shared debts, they do not have to file for bankruptcy. Furthermore, two spouses can file for bankruptcy separately if they have separate debts to help eliminate the financial burden on their family. The best way to determine how to file bankruptcy, however, is to consult a bankruptcy attorney.
Do I have to go to court if I file bankruptcy?
Yes, all bankruptcy filings must go through a court hearing and process. Approximately 30-40 days after you file for bankruptcy, you will stand before a meeting of creditors to determine how to move forward with your bankruptcy and devise a plan for discharge and/or repayment of your debts.
Knowledgeable Louisiana Bankruptcy Attorneys Near You
If you’re feeling overwhelmed by debt and looking for a way to secure a promising financial future for your family, it’s time to talk to a knowledgeable bankruptcy attorney near you. At E. Orum Young Law, we are the bankruptcy specialists. Whether you need to file for Chapter 7 or Chapter 13, we will advise you on the proper steps to take. All our attorneys are board-certified and have more than 35 years of experience in the state of Louisiana. Call or use our online contact form to schedule your free case review today.