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How do you go through the bankruptcy process successfully?

On Behalf of | Apr 22, 2022 | Bankruptcy

Many people in the United States are living with a great deal of debt. Some people have struggled for many years and some people have debt that they acquired more recently. If the debt escalates and becomes out of control, the person may feel that the only solution is to declare bankruptcy.

There are many types of debt that can impact a person’s life and force them to make decisions that will impact their life for many years. Some of these are medical debt, real estate debt, household bills and credit card debt. There are many more.

At times, bankruptcy is the best option

There are two types of bankruptcy that you can choose, depending on your particular situation. The following descriptions will give you some idea about the two main types of bankruptcy that people consider.

  • Chapter 7: This is a type of liquidation. Chapter 7 is generally a simple process in which the debtor sells their assets to pay for the debts that can be covered by the amount of money that is raised. Most or all of the remaining debts are forgiven.
  • Chapter 13: This is a wage-earner bankruptcy. This type of bankruptcy process lets debtors who have a steady income pay off their debts over an agreed-upon time period. The time range is usually 3 to 5 years. Once that time period has ended, the remaining debts will be forgiven.

Many Americans are struggling to make ends meet because of debt

No matter which type of debt you are struggling with, it can contribute strongly to your having to deal with personal bankruptcy. According to statistics, almost 20% of all U.S. households have overwhelming debts that they are having a difficult time getting out of. In many cases, at least some of their debts have been with them for a long time.

One downside to bankruptcy is that the process itself can be somewhat costly. There are many fees involved and from one perspective, entering into a process that is costly if you are trying to erase your debt does seem counterproductive. However, it is important to weigh the pros and cons and to determine which approach makes the most sense.

Solid advice from a knowledgeable bankruptcy lawyer

If you are experiencing extreme debt and feel that bankruptcy is the only answer to your financial problems, the solid advice of a knowledgeable Memphis lawyer can help you to understand the different types of available bankruptcy and which one is the most appropriate for you in your situation. Choosing the correct path is essential to eventually getting back on your feet and moving forward with your life.