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September 06 2013

filingbankruptcy

Bankruptcy Debt Relief

The U.S. government provides bankruptcy as a solution for people and businesses who are struggling with their finances. Filing for personal bankruptcy helps those who are facing financial problems due to unemployment, underwater mortgages and many others. Bankruptcy has become an option for homeowners who are losing their homes to foreclosure, while some are losing large amounts of valuable equity.

The decision to file bankruptcy is often a last resort because it can be a complicated and lengthy process. But bankruptcy can offer a huge relief to anyone who is overburdened with debt. It offers a chance to start over financially by wiping out most, if not all, debts.

Although some might say that there is a social stigma attached to filing bankruptcy, it is important to know that bankruptcy is an option not just for a person with recurring poor credit or the over-spender. There are many bankruptcy filers who are hardworking individuals who used to have outstanding credit ratings. Unexpected things happened to them, like sudden job loss and medical emergencies. Those who have spent years of discipline and hard work into establishing a strong credit standing have turned to bankruptcy because their finances have gone down for reasons that they could not control.

Filing for Chapter 7 or Chapter 13 bankruptcy is a practical solution for certain financial situations. Chapter 7 bankruptcy involves liquidation of non-exempt assets where most of the unsecured debts are discharged or wiped out. To be able to file for a Chapter 7 case, the debtor has to pass the means test. This type of bankruptcy option is available to those who cannot afford to pay back the debts they have accrued. Individuals who are not qualified to file for Chapter 7 bankruptcy may still file for Chapter 13.

Once a debtor files for bankruptcy, the debtor will immediately experience relief from creditors through the automatic stay. It stops all debt collection activities once the debtor files for bankruptcy. Creditors are not allowed to contact debtors either by mail or phone throughout the duration of the bankruptcy. If the debtor's home is in foreclosure or the debtor's salary is being garnished, the automatic stay will temporarily hold them off, which will free up the debtor’s wages and allow more time to figure out how to deal with the foreclosure.

Chapter 7 is the least complicated and the quickest as well. Most of the time, debtors can complete a Chapter 7 case within three to six months. The debts are paid off through a repayment plan with affordable monthly payments.  Chapter 13 repayment plans can be completed within three to five years. The monthly payments would depend on the net income and expenses of a debtor.

If you are struggling, http://www.bankruptcylawyersanantonio.com/san-antonio-bankruptcy-attorney to manage your debt, you should see a bankruptcy attorney to talk about your bankruptcy and even non-bankruptcy options. Talking to a legal professional would be helpful in making better choices in dealing with your unique financial situation.

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