Bankruptcy is a practical solution for people with debt problems. It will help them hold onto their essential assets, create a stable financial plan, and rebuild their credit. However, there are limitations to bankruptcy that you need to understand if you are seeking debt relief.
A Chapter 7 Business Bankruptcy can help provide you with insight into the area of the law. Your attorney will assist you if you apply for bankruptcy litigation, commercial bankruptcy, or personal bankruptcy.
What bankruptcy can and can not do
Bankruptcy is a powerful solution to debt problems. Bankruptcy can do the following.
Put an automatic stay.
People can face lawsuits, foreclosure notices, repossessions, and collecting calls and letters. The automatic stay allows contact to stop. After that moment, if someone files a bankruptcy case, the creditors will cease their collection efforts. It includes a stay-on attempt to foreclose on the property.
Discharging certain debts
Bankruptcy will eliminate many debt categories, which include medical bills, credit card debts, or personal loans.
Restructure or reduce some types of secured debt
If you owe something more than its worth, bankruptcy can allow you to restructure or reduce the debt to make it more manageable.
Allot to keep some specific property
Bankruptcy law allows filers to exempt various interests in a property like personal items, vehicles, and equity in the home. In chapter 7, the non-exempt assets are known as liquidation.
Will chapter 7 bankruptcy clear all the debt?
Some debts can not be discharged in chapter 7, which includes the following.
- Court fines
- Student loans
- Tax debts
- Forms of non-marital debt
- Criminal restitution.
Will my credit score suffer?
Most people ask what will happen to the credit score after filing for bankruptcy. If your credit score were good before filing bankruptcy, you would observe a reduction in your credit score. If the credit score was before filing, then the impact will be less. You can work to rebuild your career and increase your score over time. Unlike other unsolved defaulted debt, bankruptcy provides a superior approach and rebuilding their credit.
Does chapter 13 discharge is expensive than chapter 7 discharge?
Non-supported marital debts are discharged in chapter 13, and the exception for malicious and willful injury is limited, which causes personal injury. In chapter 13, some debts might not be discharged and will be provided and paid through chapter 13 such that the debt will not be present at the end of a successful case.