When overwhelmed by debt, it may seem like there is no way out. You may be dealing with debt collectors calling and creditors sending you notice of various types of collection efforts, such as wage garnishment. While it may seem like a hopeless situation, there is another option available to you. You could find a better financial future through bankruptcy.
Most people view bankruptcy through a negative lens. There are many misconceptions about this process, and they may keep someone from making an important decision about his or her future. In reality, either Chapter 7 or Chapter 13 bankruptcy could offer you a way to deal with your debt and emerge from the process with more financial stability and security. It is important to first learn more about the differences between these two options and what they mean for you.
Chapter 7 bankruptcy
This process is ideal for individuals who have a significant amount of unsecured debt, such as credit card debt, medical bills and more. This is liquidation bankruptcy, so it may require relinquishing some assets. However, bankruptcy laws allow for exemptions that will provide you a way to keep your most important possessions. This process typically takes between three and five months to complete, and it results in a discharge of certain balances.
Chapter 13 bankruptcy
This chapter of consumer bankruptcy is ideal for individuals who are facing foreclosure or who may not be eligible for Chapter 7 bankruptcy. This process takes longer to complete, but it does not require that you liquidate your assets. It reorganizes your debt, providing you a way to make payments. It is important to understand that student loan debt is not eligible for discharge under Chapter 7 or Chapter 13 bankruptcy.
The best choice for your future
There are many factors to consider when deciding whether you should file for Chapter 7 or Chapter 13 bankruptcy. There are eligibility requirements you must meet, and it will be helpful to learn about the options available to you according to your income, the debt you owe and other factors.
The decision to file for consumer bankruptcy is an important choice. It is in your interests to seek the guidance and support or an experienced Kentucky bankruptcy attorney who can help you make the best choices for your future. An assessment of your case can allow you to better understand how you can take steps that will help you deal with your debt once and for all.