Overcoming Debts the Legal Way

debtWhen in debt one’s self-esteem and enthusiasm in life can easily be overcome by worry and uncertainty. This, certainly, is the same situation that millions of honest and hard-working individuals, who have problems paying their debts due to loss of employment, sickness, disability or death in the family, are experiencing. Worrying, however, will never solve debt problems, but a legal solution will: Bankruptcy.

There are millions of individuals in the US who file personal bankruptcy every year. Filing of personal bankruptcy is a legal right stipulated under the Bankruptcy Code, which the US Congress passed in 1978. This law was passed to help individuals, families running a business and business firms find ways to pay their debts and so regain control of their finances. There are different chapters in the Bankruptcy code, each designed to address the specific needs and financial situation of debtors.

Besides providing affordable solutions to paying debts, filing of personal bankruptcy also offers a host of other benefits, like cessation of the harassing tactics employed by collection firms in order to make a debtor pay his or her debts and freedom from dischargeable debts. While it is true that a debtor may have to surrender some of his or her properties/assets which will have to be liquidated, there are specific properties which, under the law, he or she can rightfully keep.

Summing it up, when in debt, one can either continue wallowing in this situation or take steps in solving his or her problem through bankruptcy. The important thing that people should understand though is that bankruptcy is not a way to escape debts and debt payments; it is rather a way to pay one’s debts in the easiest, legal way possible.

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Election Polling Discusses: When Should You Hire a Bankruptcy Attorney?

Bankruptcy is unfortunately a much more common problem these days, with the recession, unemployment, and failing businesses left and right. Though many people associate bankruptcy with big corporations and the like, the ordinary man on the street may feel the need to engage the services of a bankruptcy attorney sooner than they think.

There are two types of bankruptcy in the US for individuals. The first is Chapter 7, which involves the liquidation of certain key assets and using the proceeds to pay off as much of the debts as possible. The second is Chapter 13, which involves a repayment scheme mandated by the court geared towards fulfilling obligations with creditors.

The advantage of Chapter 7 bankruptcy is that the debtor becomes free of any obligation to pay off any money owed not covered by the sale of assets. However, it is not at all easy to successfully file for Chapter 7 bankruptcy. In most cases, unless a person is completely without the means to pay, a lawyer may instead suggest a Chapter 13 filing.

In this case, legal assistance will be immensely valuable because they can more effectively negotiate with creditors to get the best possible terms for their client. More often than not, creditors are willing to accept substantial reductions in their claims to ensure that they get at least most of the money owed. A bankruptcy attorney will also be able help you protect your property by getting a court-mandated delay in foreclosure or repossession.

While a person may independently file for bankruptcy, it’s more complicated than it seems. Legal representation may seem like a waste of money when financially distressed, but because there are many pitfalls of which the ordinary person may not be aware, it may cost more not to hire one.

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