Virtually all individuals would agree that filing bankruptcy is not a pleasant undertaking. In numerous instances, however, it is an individual’s only alternative. If one is continuously being contacted by creditors and collection companies, but has no realistic hope of satisfying the outstanding debt, the only suitable option may be bankruptcy.
Going bankrupt voluntarily is defined by the US legal code as a procedure whereby an individual or business can discharge debts by declaring that they have absolutely no way to satisfy their creditors’ demands. The process can also occur involuntarily. When this is the case, creditors are given permission to force individuals who have borrowed funds to answer for their failure to repay the money. In both instances, filing takes place under one of two Titles: Seven or Eleven.
Most individuals can choose to file under Chapter 7. They must be willing to liquidate their property and belongings to pay back the institutions to which they owe money. A person may also decide to file under Chapter 11, which differs somewhat from Chapter 7. Under Title Eleven, the filer is allowed to discharge certain loans completely, while others must be paid off with his or her future earnings.
Businesses usually file under Title Thirteen. The latter provides a way for the corporation to reorganize and continue to conduct business while paying back some of the money they owe. However, there are frequent changes to bankruptcy law, and for this reason it is a good idea for individuals to consult with a lawyer prior to taking such action.
Bankruptcy was designed to halt the ongoing deadlock that exists between borrowers and lenders when the former have no reasonable hope of paying back monies owed. However, the process should not be abused or considered an avenue through which one can ignore financial obligations to various lenders. Rather, the process was created to provide someone who is hopelessly overwhelmed with debt to keep his or her household going, while attempting to compensate his or her various creditors.
The primary benefit for those who go bankrupt is the discharging of unsecured debts. Further advantages include the cessation of collection activity: creditors and lenders must refrain from pursuing the filer once he or she has begun the bankruptcy process. Another benefit associated with bankruptcies is that most consumers can eventually improve their credit score, as a significant reduction in the number of open accounts in their name typically occurs after the process is complete.
Even though bankruptcies can be completed without the services of a lawyer, this course of action is not usually wise. Most individuals state that they feel more confident when represented by an attorney. When choosing a lawyer to handle such a process, selecting the firm that has extensive experience in all kinds of bankruptcies is in the best interest of the consumer.
Numerous legal professionals provide free consultations during which a person can talk at length about his or her situation. If the lawyer seems disengaged or his or her answers are vague, the services of another attorney should be sought. Discussing factors such as the length of time the process will take and any applicable fees is also important. No matter why one is filing bankruptcy, when the situation is turned over to a qualified lawyer the filer will enjoy peace of mind.
Our website explains how you can take steps in filing bankruptcy and putting an end to your debt problems. For guidance and advice, visit http://jpg3law.com.