Bankruptcy can feel like giving up. In truth, bankruptcy protections are there to help people who are overwhelmed and feel there is no way out. It does not take much to get in over your head these days, and debt is becoming such a part of life that most Americans cannot imagine life without it. However, for just a moment, imagine your life without any credit card bills, without any charge-offs or bad debt collection companies calling you. Can you imagine how much freer you would be and how much more money you would have left over each month? What would you do with it? Would you save more this time around? Maybe take a small weekend trip with loved ones? Maybe just build up a little nest egg for emergencies?
At Miranda, Magden & Miranda, LLP, our bankruptcy lawyers know just how painful it can be to live with soul-crushing debt. Every day, we counsel and advise clients on getting out of debt. Sometimes, bankruptcy is not the right answer, and sometimes it is. If so, you have options. Let our team help you select the right type of bankruptcy for your situation.
When people think of bankruptcy, Chapter 7 is what they are often thinking about. It is the clean, fresh start type of bankruptcy that puts people back on track immediately. You file your paperwork, and once reviewed, interviewed, and approved, you are discharged. That is it. Assuming you qualify, this is typically the best way to get a completely clean slate and start over. Of course, not everyone will meet the means test for income and two other qualifying tests. Likewise, if you own assets like a home, an investment, or have a business, Chapter 7 will often not be the best option for you. Likewise, if your income is too high, you will not be allowed to file this type of bankruptcy.
Think of a Chapter 13 bankruptcy as more of a debt consolidation plan. You still make payments on some of your debts, but not directly. Instead, the bankruptcy trustee, who is an experienced government attorney, will act like an administrator to gather assets and income, determine the full value of all debts, then distribute payments according to a schedule. Your bankruptcy schedule lists all known debts and assets and describes how the creditors will be paid from existing assets. This type of bankruptcy usually is your best way to keep your home while discharging your debts. Chapter 13 plans are normally set up for five years, depending on the requirements at the time and on your needs.
An Attorney Can Help You Keep Your Assets
Ultimately, it is your attorney’s responsibility to help you pick the right chapter of bankruptcy that allows you to avoid significant liquidation of your assets. This is one of the reasons why it is necessary that you work with a skilled attorney with experience in this specific area of law who can ensure you have enough after the bankruptcy process to move forward with your life.
If you do not know which type of bankruptcy is right for you, call Miranda, Magden & Miranda, LLP today. Our experienced bankruptcy lawyers can help you put together a plan that works.