Anyone can fall on hard financial times. The sudden loss of a job, the onset of an unexpected medical condition, even caring for aging loved ones can strain an individual’s finances. Typically, these individuals try to do everything they can to stay afloat, even at the expense of their own emotional and fiscal well-being. Sadly, though, far too often these efforts are for naught because individuals in debt often wind up stuck in a spiral that only drives them deeper and deeper into debt.
This doesn’t have to be the case. Instead, those facing insurmountable debt can choose to seek out true debt relief in the form of bankruptcy. Bankruptcy offers a multitude of protections. One of the biggest is the automatic stay. Upon the filing of a bankruptcy petition, most creditors are prevented from attempting to collect outstanding debt from an individual. This can keep an individual’s home out of foreclosure and their car away from repossession. This stay gives a Chapter 13 debtor the opportunity to come up with a realistic repayment plan that they can accomplish over a number of years.
In many instances, it may be better to seek Chapter 13 bankruptcy protection rather than that provided by Chapter 7, especially if you intend to keep certain assets. Although a Chapter 7 filer can keep an asset by reaffirming the debt, they must become current on payments almost immediately. A Chapter 13 filing, on the other hand, may give a debtor much more time to make up those payments, thereby creating less financial hardship while allowing them to keep the asset in question.
Bankruptcy often gets a bad rap, but it can truly set an individual on a course to a fresh financial start. There are a number of legal strategies and arguments that come into play in these cases, which is why it is often beneficial to discuss the possibility of seeking bankruptcy with a trusted legal professional.