Are your finances a mess? Are you overwhelmed by countless bills? It can seem hopeless, but all is not lost. You might be able to file for bankruptcy and there are various types of bankruptcies to choose from. Filing bankruptcy is a tough decision, many have done it and ended up with substantial relief. If you’re considering filing bankruptcy to help you erase your debt, it makes sense to consult with an attorney to figure out what type of bankruptcy is right for you. Below we’ll discuss some of the major types of bankruptcy.
What are the different types of bankruptcy?
1. Chapter 7
Chapter 7 is a very common form of bankruptcy. To apply, you must show evidence of severe financial need. You can file Chapter 7 bankruptcy whether you’re a consumer or a business owner. The filing may exempt most of the unsecured debt. But in most cases, non-exempt assets will be liquidated to pay your debt. Other debts that won’t be paid through liquidation are discharged except;
Student loans
Child support
Alimony
Recent credit card purchases
Criminal/ DUI fines
2. Chapter 11 bankruptcy
This type of bankruptcy is useful to businesses wishing to restructure debt through reorganization and still maintain business operations. It’s very intricate and expensive and requires the expertise of an experienced bankruptcy attorney.
3. Chapter 13 bankruptcy
Chapter 13 bankruptcy helps debtors with regular sources of income to restructure their debt. It allows you to retain your assets through a payment plan approved by the court. Chapter 13 bankruptcy is ideal for debtors wishing to hold on to their property, such as mortgage or vehicles. However, you must meet some income requirements to file for this type of bankruptcy.
Why involve an attorney when filing for bankruptcy?
Filing for bankruptcy can be stressful and time-consuming, but a lawyer will ease the process. They will guide you in choosing the best chapter under which to file bankruptcy. Bankruptcy attorneys have different specialization areas; they either deal with personal or corporate bankruptcies and know the most suitable strategy to implement.
What’s more? Filing for bankruptcy involves lots of paperwork, which can be tedious. But, an attorney will manage this with ease. They also know the type of work and evidence required in the process of filing bankruptcy.
What determines the attorney’s fees?
All attorneys charge varying rates. The charges are usually determined by the experience and the location of the lawyer. Moreover, the experience of the attorney matters. Bankruptcy is very complicated and involves tedious and lengthy processes. The expertise of the lawyer can determine how your case goes.
You’ll find that experienced lawyers offer services for a higher cost than new attorneys with fewer years of experience. All in all, it’s advisable to choose an attorney wisely. An experienced professional will save you a lot of time and will likely offer a favorable outcome.
Final thoughts
Filing for bankruptcy comes with different requirements, and you should understand the state laws. To ease the process, hire a skilled attorney, and they will advise you on how to go about the process. Also, know the different types of bankruptcy and the types of lawyer fees.
