Get Answers to Common Bankruptcy Questions
You may have heard of bankruptcy before and know that it’s an option to help you get out of debt. However, you may not have all the information you need to determine if bankruptcy is the best option for you. Carolyn Secor P.A. is here to help you get the answers you need. We’ve compiled a list of common bankruptcy questions so our Clearwater, FL clients can better understand the process and how it works. If you believe bankruptcy is the best option to help you get out of debt, we encourage you to schedule a free consultation with our team. We’ll discuss your financial situation and determine whether bankruptcy is the appropriate method for you. Please contact us to set up a time to meet.
What is Bankruptcy?
Bankruptcy is a legal process that allows individuals with severe debt to find some relief when they are no longer able to make payments. The process gives you the opportunity to work out a new plan of repayment or wipe out your debts altogether. Filing bankruptcy also comes with certain protections, as all creditors must halt any collection efforts or face legal consequences. Bankruptcy is necessary for some individuals to get a fresh start and rebuild their credit.
Does Bankruptcy Require Me to Give Up My Home or Car?
Fortunately, you have options when you file for bankruptcy. There are many types of filings that allow you to choose which assets you must give up and which you can keep. This means you will likely be able to keep your home or vehicle, depending on the severity of your situation.
Will My Credit Be Ruined Forever?
This is a common misconception. Bankruptcy is a way to start over. It will not ruin your credit forever. Though your credit score will decrease after filing for bankruptcy, you will have the opportunity to rebuild it as you start over with fewer debts. You can learn better spending habits and how to use credit responsibly in order to start improving your credit score.
Is There a Way to Stop Creditor Harassment?
You can stop harassment from creditors by filing for bankruptcy. When you file, the court issues something called an automatic stay, which requires creditors to stop any collection efforts. An automatic stay actually makes collection efforts illegal, and the creditor could face a fine if they continue contacting you.
What is Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is also known as a liquidation and is meant for those individuals who cannot pay any portion of their debts. During this process, most or all of your unsecured debts are eliminated. Any non-exempt assets you own can be liquidated to pay off creditors. In many cases, a person’s belongings are all considered exempt, so they cannot be sold. You must qualify to file for this type of bankruptcy by proving that your income is not sufficient to repay your debts.
What is Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy does not require liquidation, and instead develops a payment plan for full or partial repayment of debts. When you file for this type of bankruptcy, you’re able to work with the court to create a plan for repayment that is reasonable for you to complete. Repayment usually takes place over a three or five-year period. You’ll likely get to keep most of your assets, as liquidation does not have to take place during a Chapter 13. However, if you fail to make payments according to the agreement, you could find yourself in additional financial trouble.