Bankruptcy may sound like failure, but it is often the beginning of success for people with large amounts of debt. The different types of bankruptcy often offer bespoke options to those suffering under too many obligations and liabilities.
What are the advantages of bankruptcy?
An approved filing for bankruptcy lifts most legal obligations created by debt. It may stop foreclosure proceedings against a property or asset, as well as the termination of a utility or other service. In some case, a person's credit score may improve, and creditors will no longer harass a person under bankruptcy protection.
What are obligations unaffected by bankruptcy?
Most court-ordered fees and fines, such as child support payments and court restitution, are still due after a bankruptcy filing. Any cosigners of mortgages and other forms of debt are not protected from consequences, such as poor credit ratings or forfeitures.
What is the big difference between Chapter 7 and Chapter 11?
Chapter 7 bankruptcies, often called liquidation, involves all available assets being sold by a court-appointed trustee to settle any possible debts. Chapter 11, usually known as reorganizations, allows businesses and individuals to retain many of their assets while paying significant monthly installments to settle debts. Businesses and people with very high levels of debt are more likely to file under Chapter 11.
Do I need a lawyer to file for bankruptcy?
A person may file on his or her own, but a filing with legal representation may have a better chance at success. A good filing can spell financial relief for a person or a business. An attorney can guide debt-ridden people and institutions through the proper steps to begin recovery.