Being in debt is a problem we all face. However, if you’re currently facing overwhelming debt, bankruptcy might be an option you want to consider. There are several advantages and disadvantages to filing bankruptcy, and it’s important to have an expert in bankruptcy to help you understand how to file for bankruptcy, if you do decide to file for it. A bankruptcy lawyer can also help you determine whether you should file for a Chapter 7 bankruptcy, Chapter 11 bankruptcy or a Chapter 13 bankruptcy.
Here are the main types of bankruptcy and what each of them entails:
1. Chapter 7 bankruptcy: When you hire a Chapter 7 bankruptcy attorney, you’re likely filing for what’s known as “liquidation” or “straight bankruptcy.” Chapter 7 bankruptcy relieves you of most of your debts, and you will immediately get an “automatic stay,” which means creditors can no longer contact you about outstanding debt. It’s important to know that Chapter 7 bankruptcy doesn’t erase all debts — for example, you will still be required to pay off student loans and tax debts.
2. Chapter 11 bankruptcy: A Chapter 11 bankruptcy attorney works exclusively with businesses, rather than individuals, struggling with debt. If your company is facing overwhelming amounts of debt, Chapter 11 bankruptcy might be the answer for you. It’s important to note that Chapter 11 will not cause your business to “go under,” but can help restructure your debts in order to help your company start fresh.
3. Chapter 13 bankruptcy: A Chapter 13 bankruptcy attorney can help you file for a bankruptcy that will give you a new financial start, but you’ll still be required to pay off some of your remaining debts.
Having too much debt can feel crippling and even debilitating. You deserve to start anew. If you decide that filing for bankruptcy is your best financial option, consult a local bankruptcy attorney to find out how he or she can help you start a fresh financial future.