Filing for bankruptcy is an important decision. You should carefully consider how bankruptcy may affect you and how it may help you. While it may seem scary or that you are facing a crisis, bankruptcy can provide relief from financial stress and burden and offer a fresh start. If you are an individual or a business struggling with debt, bankruptcy may be just the resolution we need. Here are some of the situations you may be facing and that filing for bankruptcy might be able to help.
- Crisis #1 – You have debt that you cannot manage. When debt becomes unmanageable, filing for bankruptcy can be a way to regain control.
- If your debt is from medical bills, credit card debt, personal loans, or a combination, bankruptcy can discharge those debts entirely (in a Chapter 7) or help you restructure those debts (in a Chapter 13). Medical expenses can add up quickly and become overwhelming, even if you have health insurance. Bankruptcy can provide either a discharge or restructure your medical debt. Focusing on recovery instead of financial stress will help you get healthy faster. This will also help you or your business start fresh financially.
- Bankruptcy can discharge unsecured debts, such as credit card debt and personal loans. If your minimum monthly payments are high, filing bankruptcy can alleviate the burden of these monthly payments, putting that money back into your pocket. This will provide you with a fresh financial start.
- Crisis #2 – You are facing lawsuits and are not sure of your options. Bankruptcy offers legal protection from creditors. If you are facing foreclosure, a bankruptcy could delay a pending foreclosure sale. A bankruptcy can give a homeowner an opportunity to explore alternatives to save your home. A Chapter 13 bankruptcy can help you catch up on missed mortgage payments through a repayment plan. If there is a garnishment against your wages, a bankruptcy will stop and possibly cancel the garnishment. If you have a car that has been repossessed or is in danger of being repossessed, bankruptcy may be able to help you. A bankruptcy cases utilizes a concept called the “automatic stay” to freeze any actions of creditors against you. This safeguard can provide relief to and allow you to assess your financial situation with a clearer lens.
- Crisis #3 – Your income has been temporarily reduced. If you or your business have lost income, lost your job, your business is failing, bankruptcy can be a strategic move. A Chapter 7 bankruptcy may help alleviate some of the financial burden. In a Chapter 7 case, you can keep certain property and any non-exempt property is sold to repay your creditors. In a Chapter 7 business case, you can quickly close down and walk away from your business. A Chapter 13 bankruptcy allows an individual to create a repayment plan based on your current income.
- Crisis #4 – Your business is struggling. For struggling businesses, filing for bankruptcy can serve as a means to reorganize operations and reduce debt. Chapter 11 bankruptcy allows businesses to continue operating while developing a plan to repay creditors over time. A Chapter 11 bankruptcy allows your business to create a repayment plan based on the business’s current income stream. This process offers the opportunity for financial restructuring and a chance to regain stability.
Filing for bankruptcy is a significant decision with long-term effects on your credit. It is extremely important to evaluate your financial situation and explore all your options. Meeting with and having a consultation with an experienced bankruptcy attorney is a smart decision before deciding to file your case. Bankruptcy can offer relief from overwhelming debt, protect you from creditor harassment, and provide an opportunity for a fresh financial start. By understanding the circumstances in which filing a bankruptcy case can be a good idea, you can make an informed decision about your financial future.
To schedule a consultation or learn more about Feher Law and how we can assist you or your business with bankruptcy, please visit www.feherlaw.com.