Debt Help Provided By Bankruptcy Courts To Individuals In Financial Crises

A severe debt situation can arise due to a number of reasons. It is important to clear a debt burden as quickly as possible, in order to get back the stability of your financial life and save your credit records from getting permanently damaged. Bankruptcy is one of the various debt solutions that can be availed to emerge out of a difficult debt situation. While it can be quite a challenge to file for bankruptcy owing to the various pessimisms involved in the procedure, adequate information obtained from experienced legal advisors can help in determining if it is appropriate for you.

If you are trying to cope with severe debt crisis, and planning to file for bankruptcy, it is important to obtain all necessary information regarding the rules and laws followed by the bankruptcy courts. Despite involving a number of negativisms, bankruptcy can help you clear the debt burdens efficiently. There are various kinds of bankruptcies that need to be known and evaluated before you can choose the right one for you. Consulting an expert legal attorney is important to decide on the most suitable type of bankruptcy for you.

If you are an individual trying to overcome a debt situation, filing for personal bankruptcy can help you clear your financial difficulties. Personal bankruptcy is divided into two types, namely chapter 7 bankruptcy and chapter 13 bankruptcy to help individuals in different financial situations.

In chapter 7 bankruptcy, the court seizes the non-exempt assets from the debtors and liquidates them for making payments to the lenders. However, there are certain bankruptcy laws that allow people to retain some of their valuable assets even after bankruptcy filing. An experienced and knowledgeable legal advisor can provide you adequate information on how to keep you assets in spite of filing for bankruptcy.

In chapter 13 bankruptcy however, you dont have to lose control over your assets. In this form of bankruptcy, you are provided with convenient repayment plans allowing you to make debt payments at affordable monthly rates and over a fixed period of time. Once you file for chapter 13 bankruptcy, the bankruptcy courts work on your behalf to negotiate with the creditors and provide you with easy repayment plans that are designed only after taking into consideration your monthly income and the necessary expenditures you have to make. You are expected to make the monthly payments only after you have paid for all your necessary monthly bills, and for a definite period of time. One of the most advantageous aspects of this type of bankruptcy is that it relieves you of any remaining debt amount after the lapse of the fixed time period.

Personal bankruptcy can help individuals immensely in overcoming severe financial crises. However, there are various bankruptcy laws made by the court that need to be known:

Personal bankruptcy can be filed only to clear unsecured debts. It cannot help in clearing unsecured debts.

You have to compulsorily complete a credit counseling course and present the certificate of completion at the court during the time of filing.

It is also a compulsory rule to pass a means test in order to prove the eligibility to file for chapter 7 bankruptcy.

While you are allowed by the court to file for bankruptcy yourself without an attorney, it is always advisable to take professional help for an efficient and successful bankruptcy filing.