Bankruptcy Attorney
Unfortunately, most consumers have experienced some type of financial hardship. Often when an individual’s debt-to income ratio is imbalanced, is when they reluctantly seek out alternatives that will help them with debts. Bankruptcy is a federally sanctioned alternative for consumers who cannot meet their financial obligations due to job loss, mounting medical bills, or some other economic hardship. However, what most consumers are unaware of is that there are two types of bankruptcy, Chapter 7 and Chapter 13. If you are considering bankruptcy, please continue reading to determine which is best for you.
Chapter 7 Bankruptcy allows for the elimination of all of your unsecured debt (e.g. credit cards, medical expenses) but any unsecured debt (e.g. mortgage, home equity lines of credit, or a car loan) must still be dealt with. Consequently, most of your personal property may be liquidated in order to pay what your owe to your creditors. Once you file for Chapter 7, you will be granted an “Order for Relief” and what this does is prohibit your creditors from proceeding with any further collection attempts, or wage garnishments. Filing for Chapter 7 does have some adverse consequences. Your credit score will be negatively impacted for a period of seven years, which means it will be increasingly difficult to obtain a mortgage, credit cards, or loans.
Chapter 13 Bankruptcy is merely a restructuring of your debt. When you file for Chapter 13, a trustee or counselor will renegotiate interest payments, fees, and maybe able to drastically reduce your outstanding balances. In return for your creditors reducing your debt, you are formally declaring through the court systems that you will adhere to a budget set forth by a credit counseling agency and the terms of the repayment plan. You will be able to pay a much smaller amount each month over a period of three to five years. In return for your willingness to pay some of your debt back you will be able to keep your personal property as opposed to Chapter 7 where your property will be sold in order to recoup some the money that is owed to the creditors. Chapter 13 also impacts your credit score but not nearly as bad as filing for Chapter 7.
What was provided was a brief overview of Chapter 7 and Chapter 13 Bankruptcy, in reality it is a very complex process and one that should not be approached without skilled representation. A Bankruptcy Attorney Los Angeles will be able to provide a consultation and help you determine which course of action would be best for you and your unique financial situation. He or she will go over in depth the advantages and disadvantages of both as they relate to your case.
The experienced bankruptcy attorneys at Wadhwani & Shandfeld are dedicated to providing knowledgeable legal assistance to our clients. We have handled hundreds of cases dealing with complex bankruptcy issues and are among the most professional Bankruptcy Lawyer in Los Angeles with a proven track record of success.