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Start Fresh with Bankruptcy

Fresh Start with BankruptcyWhen the creditors are calling and there is not enough money to pay the bills it may seem as if there is no way out. Most people go to work every day but the mounting pile of bills means there is never enough funds to pay everything. There is a way to escape the tiresome calls of the bill collectors and start over again. Bankruptcy lawyers like Cooney Law Offices are knowledgeable in bankruptcy matters.

Bankruptcy is a viable option for those who find themselves overwhelmed by debt. There are two types of bankruptcy that can be filed as an individual. The first type of bankruptcy is a Chapter 7 and the second type is Chapter 13. Filing either chapter puts a person under the protection of the court and stops all collection activities. If there are wage garnishments, foreclosure actions or repossessions in progress, all actions must be halted during the "automatic stay" period.

To determine which method of bankruptcy a person qualifies for they will need to take a means test. The means test will show if there is enough disposable income to pay the debts back. If there is no disposable income then a person must file a Chapter 7. A Chapter 7 will completely erase most debts and allows the opportunity to reaffirm a car or house, as long as it is not drastically behind and can easily fit into the new budget.

When there is disposable income, a person must file a Chapter 13. If a person has filed for bankruptcy within the past eight years, they must also file a Chapter 13. This type of bankruptcy enters into a payment agreement with the court to repay the creditors. While the creditors will receive pennies on the dollar, this is the only way for this type of debtor to find relief under these bankruptcy guidelines. The payment arrangement must be approved by the court and must be paid on a monthly basis. Thankfully, it can easily be withdrawn from a paycheck to ensure the payment is sent on-time. 

Making the final decision to file bankruptcy is a scary one. Oftentimes, people attempt to file bankruptcy on their own without the assistance of an attorney like Melwani Law. The forms and all the paperwork that is required in bankruptcy can be overwhelming. It is best to have the help of trained professional, as this is a serious matter. The entire process can be over in about three months and the burden of debt can be lifted.  If you need a Rio Rancho bankruptcy lawyer, be sure to contact one near you.