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IS BANKRUPTCY RIGHT FOR YOU?
Almost all of us are faced at some time with circumstances beyond our control. Medical problems, loss of a job, and divorce are the most common reasons that people file for bankruptcy. Our bankruptcy system gives people a chance for a fresh start by filing either a Chapter 7 or Chapter 13 bankruptcy. We are here to help you decide if this course is right for you.
A Harvard professor, Elizabeth Warren, has studied the reasons that people are forced to file bankruptcy. Although when she started her research, she expected that she would discover that people were filing bankruptcy because they had spent too much on consumer goods, in fact she found that mortgages were a much bigger issue for families. While most of us intuitively believe that having two people working in a family makes for healthier finances, in fact it just makes us more vulnerable. Families have come to depend on both incomes to survive, and if they lose just one of those due to illness, childbirth, job loss, or divorce, the family can no longer sustain itself. Bankruptcy often follows. Professor Warren's findings and her book are discussed in an article found here.
Many people feel bad about the prospect of bankruptcy, and that is understandable. We are taught that we should repay our debts, and there is nothing wrong with that point of view. But sometimes, hard-working people are simply unable to pay accumulated debt. That is when bankruptcy becomes an option to consider.
You may feel that a Chapter 13 bankruptcy would be better for you. In a Chapter 13 bankruptcy, the debtor makes payments to a Chapter 13 Trustee, who in turn pays the creditors all or a portion of the debt over time. Some people are more comfortable making these payments to their creditors, and for them, Chapter 13 is an excellent option if they qualify.
For others, the clean break offered by a Chapter 7 bankruptcy is a better choice. They might feel overburdened from the stress of carrying large debts, or they might not have enough income to make payments. For them, Chapter 7 is the right option.
There are some individuals that cannot file either a Chapter 7 or a Chapter 13, usually because their income is too high. For them, we can still offer bankruptcy protection in an individual Chapter 11. While Chapter 11 is often thought of as being for business, individuals can use it to reorganize their debts and pay back creditors over time.
All individuals will have to go through credit counseling before filing, and all individuals will receive the benefit of an automatic stay the first time they file a bankruptcy, which prevents creditors from pursuing them once the bankruptcy is filed. At Resolve Legal, an experienced Washington bankruptcy lawyer will help you decide whether bankruptcy is right for you. Call us today to schedule an appointment, or email us and we'll call you back. We are here to help.