How Do I Know If I Should File for Bankruptcy?
Bankruptcy can give you a fresh financial lease on life by allowing you to offload debt, stop creditors from hounding you, and even stop your home from being foreclosed on or your car from being repossessed. While bankruptcy will affect your credit, it can also afford you firmer financial footing, which can help you build better credit moving forward. If you’re interested in learning more about what bankruptcy could mean for you, don’t wait to consult with an experienced bankruptcy attorney in Harrisburg, Pennsylvania.
If You File, Having Skilled Legal Guidance Is in Your Best Interest
Bankruptcy is a challenging legal matter that comes with serious consequences, which should be carefully considered. If you feel like you are drowning in debt that you can’t get a handle on, bankruptcy might be your best option, but proceeding with caution is advised. Fortunately, a trusted bankruptcy attorney can help you with that.
Signs that You Should Look into Bankruptcy
Some of the signs that indicate it’s time to consider bankruptcy include the following:
- Your home is at risk of foreclosure.
- Creditors are threatening to sue you for debt payment – or have already begun the process.
- You’re living off your credit cards, and your available credit is dwindling.
- You’re using one credit card to make payments on another.
- You’re considering dipping into your retirement accounts to get your finances back on track.
It’s important to note that if you’re at risk of losing your home or car, reaching out to your lender or an attorney, sooner rather than later might be in order. Lending companies often make arrangements with borrowers who are in financial distress, and ignoring the issue could lead to dire consequences.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to exempt most assets and possibly liquidate certain assets, using that money to pay down your debts under the court’s supervision. Individual bankruptcies require what is known as a means test to determine whether you’re capable of covering your debts in a Chapter 13 or 11 instead of filing a Chapter 7. If, however, your income is below the state median, you qualify for Chapter 7. Those assets that are necessary to continue living your life, such as your car and home, are generally exempt from the liquidation process, but you’ll need to catch up with your payments.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy sets up a payment plan over the course of 3 to 5 years that is designed to eliminate your debt. This plan must be approved by the court. This is intended to help those who have regular income and who are capable of meeting the financial demands of the payment plan. Chapter 13 bankruptcy generally amounts to paying considerably less than the original amount owed, and it stops the foreclosure process or a car repossession. Chapter 13 is also for people who cannot exempt all of the assets, have income, which is too high for Chapter 7, or have large tax bills and need time to repay the taxes.
Consult with an Experienced Harrisburg Bankruptcy Attorney Today
The formidable Harrisburg, Pennsylvania, bankruptcy attorneys at Cunningham, Chernicoff & Warshawsky, P.C., appreciate how challenging living with overwhelming debt can be, and we spare no effort in our quest to help every client we represent obtain a beneficial resolution that supports their ability to move past their financial difficulties. Learn more by contacting us online or calling 717-260-3527 today.