Millions of Americans have loads of debt that they struggle to pay off. Unfortunately, not all people can pay off their debts, so they need a way out, and bankruptcy may be their best option. When it comes to bankruptcy, there is so much to think about, and decisions should be made without understanding the basics of filing for bankruptcy and some of the consequences.
Types of Bankruptcy
Under U.S. bankruptcy code, there are several types of bankruptcy structures for individuals who want to need relief from personal or business debt. Several variables dictate which structure is best including the amount of debt you have, your monthly income and what types of debt you have. If you are considering bankruptcy, below is come basic information to help you make your final decision.
When you have too much personal debt you have two options for bankruptcy:
Chapter 7 bankruptcy:
Requires you to liquidate your assets
Takes several months to a year
Applicable debts are discharged
Chapter 13 bankruptcy:
Debt restructuring plan
It takes three to five years to complete
Debts are paid off instead of discharged
Better credit rating after completion
Chapter 7- Liquidation
Chapter 12- Family farmer or fisherman bankruptcy
Chapter 11- Reorganization
Chapter 13- Debt restructuring
Why Should I File for Bankruptcy?
U.S. Bankruptcy Courts received 819,159 bankruptcy petitions in 2016 business year ending June 30, 2016. Those filings include:
Business bankruptcies- 25,227
As those numbers indicate, plenty of Americans face debilitating debt and have few options to get out of their predicament. You may not be comfortable with the idea of bankruptcy, but it will give you a fresh start with your finances. Meet with a lawyer and let them explain the pros and cons of going through bankruptcy.
What Are the Consequences of Filing for Bankruptcy?
Filing for bankruptcy has consequences you need to be aware of before you decide which structure is right according to your needs. After you complete the process, you may face difficulties getting a home or auto loan or credit card until you re-establish your credit. Bankruptcy will remain on your credit reports for several years, depending on the chapter you go through.
Hire a Bankruptcy Lawyer in Minnesota
When you have a legal dilemma, you may be tempted to try and navigate the legal system on you own, but that’s a major mistake. Our bankruptcy attorneys in Minnesota have comprehensive knowledge of federal and state laws, so they can help you choose the right bankruptcy structure and help you negotiate for favorable terms.
You should consult with a bankruptcy attorney in Minnesota if you have the following debts:
Credit card debt
USattorneys.com has bankruptcy lawyers throughout Minnesota who can explain the choices you have and what structure will work best for you. Call and arrange a meeting with an attorney today to see if bankruptcy will be advantageous for you or your business.