The bankruptcy process is not something people jump into. In fact, the decision to file for bankruptcy is one that is often a last resort for many people. While the process is extremely valuable for many people, there are some issues to consider before entering the process.
When filing for personal bankruptcy you must decide which type of bankruptcy to file. Filing for Chapter 7 may provide the debt elimination you are looking for, but not everyone will qualify. There are strict rules regarding debts and income levels in order to be eligible for Chapter 7. If you file for Chapter 7 and are denied, you could be wasting valuable time and money before finding the debt help you need through Chapter 13 instead.
Types Of Debt
Most people never think twice about the state of their debts when entering bankruptcy. Secured debts, such as a mortgage or car loan, can be tricky to manage in a Chapter 7 case and may be better resolved through Chapter 13. Unsecured debts, such as credit cards and medical bills, are generally easy to resolve in either type of bankruptcy case, but not all unsecured debts qualify for bankruptcy. For example, some tax debts, student loan debts and child support debts are typically not admissible into a bankruptcy case. Knowing which type of debt you hold and how it is best managed can help ensure the best possible outcome to your case.
Consulting a bankruptcy attorney before filing is strongly recommended. Their knowledge and expertise is unmatched by anyone from another industry. An attorney can review your case and determine whether bankruptcy is truly right for you or whether you may be able to resolve your financial troubles in another way. Further, an attorney can help you with the qualification and application process, ensuring the case is handled smoothly and efficiently.