The cost of living seems to be rapidly outpacing the amount of income many Americans are earning each month. When expenses outweigh income, it can become time for you to make a serious decision about filing for bankruptcy. But is bankruptcy the right decision for you?
It can be hard to know what the right move is in such difficult times. Job loss has been skyrocketing recently, and so many of us are facing this serious decision.
How bankruptcy can help
Your life after bankruptcy depends on the type of bankruptcy you choose. The most common forms of bankruptcy a person will ever apply for are Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 bankruptcy is the method in which an applicant must sell all of their non-essential assets to pay off as much of their debt as possible, and the government will remove the rest of their applicable debt. Assets that someone will need to sell include a vacation home, second vehicle, expensive artwork or jewelry. Through Chapter 7, you would still be able to keep your home and car, and other possessions you need in your life after bankruptcy.
Chapter 13 bankruptcy allows the person filing for bankruptcy to compile all of their debt into a single monthly payment. The payment plan for this new debt is typically a three- or five-year plan. While an applicant will still need to pay off their debt, they will also be able to keep all of their possessions through this option. If you have a reliable income, this may be the option for you.
Explore your options
Bankruptcy has a bad reputation as a sign of shame. In fact, bankruptcy is a pathway for many people to find a way out from under crippling debt. A bankruptcy attorney can help someone understand what their bankruptcy options are, and what choice is best for them.