Bankruptcy Law Firm
Bankruptcy is a part of our society’s everyday vocabulary, and most people are fortunate enough to never have to file for this process. However, for those who do decide that their debts have become more than they can handle, bankruptcy can be a lifesaver. It can erase your debt problems and bring you peace of mind fast. Bankruptcy allows you to get a fresh start by erasing mounting debts. Learn more about how filing for bankruptcy can get you out of trouble with creditors.
What Is Bankruptcy?
You may have heard of bankruptcy but may not be sure exactly what it means or entails. Bankruptcy is the legal process by which debtors who are unable to repay can appeal to the court to get relief from some or all of the money owed. The court will work with the debtor and creditors to work out a deal that allows creditors to get some of their money while the debtor gets out from under. The two main types of consumer bankruptcy filing are:
- Chapter 7 bankruptcy
- Chapter 13 bankruptcy
Which one may be right for you depends on a number of factors, including how much money you earn yearly.
What Happens to Creditors?
People facing tremendous debt often find themselves hounded by several creditors at once. In fact, getting relief from non stop calls from creditors is often one of the main motivators in filing. Bankruptcy ends harassing calls from creditors by striking a deal between them and the debtors. In a Chapter 7 bankruptcy, the debtor can get credit card debt, medical bills and personal loans wiped clean without having to agree to a monthly repayment plan. All that’s required is the debtor agreeing to allow a trustee to sell off non-exempt property pay a portion of the debt. Exempt property can include furniture, clothing and other day-to-day household goods. A Chapter 13 bankruptcy is similar but applies mostly to high-income earners.
In some cases, the debtor ends up keeping most of their property while getting creditors off their back. It’s important to know that there are a few “nondischargeable” debts that will remain with you even after you file for bankruptcy. A bankruptcy lawyer can help you understand which ones won’t disappear.
Debts can mount up quickly and before you know it, you’re unable to pay them off. This is where bankruptcy can save the day. If you’re tired of dealing with creditors you can’t pay, call a bankruptcy law firm in Memphis, TN today to learn what you can do.
Thanks to Darrell Castle & Associates, PLLC for their insight into bankruptcy law and creditors.