Filing for bankruptcy when debts become unmanageable is one important way in which a person can regain control of their financial life. Bankruptcy is one of the fastest legal solutions to save yourself from creditors and their various tactics in harassing you to pay what you owe. They will hound you through endless phone calls at home and at the office, notice of eviction and notices from law firms; they can even have a part or your full wages garnished (withheld for payment to creditors directly or through the court) or your bank account levied (frozen and seized).
Many debtors facing such a situation understandably become stressed, overwhelmed, and anxious. Fortunately, after speaking with a professional who is knowledgeable about bankruptcy, such as a bankruptcy lawyer, a debtor can evaluate their situation and options in order to formulate a plan to alleviate their financial problems. In this situation, bankruptcy is often a beneficial option. Depending on the party filing for bankruptcy, one of the many forms of bankruptcy may be more applicable or beneficial than another. The major forms of bankruptcy include:
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
- Chapter 11 Bankruptcy
- Chapter 12 Bankruptcy
Once a party files for bankruptcy, one immediate benefit they will typically receive is the automatic stay which will automatically stop any lawsuit filed against you by your creditor, the garnishment of your wages and other forms of harassment, and collection by your creditor. Bankruptcy can also discharge some or all of your debts.
Opting for Chapter 13 Bankruptcy
While Chapter 7 bankruptcy is often a popular choice of bankruptcy for debtors as it eliminates many of their debts, Chapter 13 bankruptcy is a beneficial alternative, as it lets you keep all of your properties while your debts are restructured for a single monthly payment. This restructuring is intended to enable you to make affordable payments over a period of 3 to 5 years. After continuous payment for 5 years, whatever remaining balance there still is could potentially be discharged.
As Chapter 13 bankruptcy also eliminates further interests and penalties on debts, it definitely can serve as the best solution to a worry-free and controlled financial life again.