Putting Bankruptcy Law to Work on Your Behalf
Worried about mounting personal or professional debts? Filing for bankruptcy could be a viable solution, but only if you manage your case properly. Here’s a quick introduction to bankruptcy law and some of the reasons you might want help from a Royal Legal Group lawyer.
What Is Bankruptcy?
Bankruptcy is a special legal status that signifies that you lack the resources to repay your debts. To obtain this status, you must submit a formal filing to a bankruptcy court. If you’re deemed worthy, you may gain specific protections, such as a halt on creditor collection.
How Will Filing for Bankruptcy Affect Me?
Different forms of bankruptcy are designed for distinct debt situations. With Chapter 7, or liquidation, you’ll be forced to relinquish your assets to a court agent who sells them off to pay your creditors. In Chapter 13, or debt adjustment, you’ll work out a five- or three-year plan for repaying your debts. Chapter 11 bankruptcy, or reorganization, helps businesses restructure their debts without having to completely shut down.
Making a Smart Choice
Each variety of bankruptcy comes with unique obligations and requirements. For instance, you can only file for Chapter 7 once every six years, and there are limits on how much and what type of debt is eligible for Chapter 13.
Going bankrupt also impacts your future as a consumer. Chapter 13 filings remain on your credit reports for seven years, and Chapter 7 filings stay on record for a whole decade. Of course, filing for protection and legally resolving your debts are definitely less harmful to your score than simply defaulting or otherwise ignoring the problem.
The filing that works best for you depends on factors like the nature of your debt and your ability to repay. It’s vital to choose an appropriate option that suits your legal, personal and financial situation.
Getting Started Correctly
Is filing for bankruptcy right for you? It ultimately depends on your circumstances and willingness to move forward. Bankruptcy is a powerful tool, but there are limits to who can file and many procedural requirements for those who do. Fail to follow the rules, and you may jeopardize your eligibility for protection.
Obtaining bankruptcy protection won’t completely absolve you of your debt obligations, but it can make them much easier to manage correctly without being hounded by creditors. Discover how bankruptcy law might give you a clean start. Contact a Royal Legal Group lawyer now for your complimentary case assessment.