With nearly one million bankruptcies reported on an annual basis across the United States, it’s safe to say that Americans are overwhelmed with debt. While some assume that one’s debt is the result of irresponsibility, this is not always the case, nor is it that simple. From credit card debt to medical debt, loss of wages or divorce, there are numerous circumstances that lead one to explore the idea of filing for bankruptcy. Thus, while it may appear devastating on paper, there are some instances in which bankruptcy brings welcome relief to those that truly want to better their situation.
To best understand the idea of bankruptcy, let’s begin with a simple definition of what it means to be “bankrupt.” In short, individuals are considered bankrupt when they cannot pay their debts, whether the money owed is personal or business-related. Therefore, filing for bankruptcy is a process by which individuals attempt to pay their outstanding debts. With that in mind, however, there are several types of bankruptcies. Consider the following:
Chapter 7 Bankruptcy: While there are income restrictions to file for Chapter 7 Bankruptcy, those that can file will have their assets (property, vehicles and more) liquidated. Essentially, this means that assets are turned into cash, which is then used to pay creditors. In return, the debt is eliminated. However, a Chapter 7 Bankruptcy does not include school loans, child support and taxes.
Chapter 13 Bankruptcy: When individuals do not meet income restrictions to file for Chapter 7 Bankruptcy, filing Chapter 13 Bankruptcy is usually their best bet. This type of bankruptcy includes a payment plan of sorts, which may be 3-5 years to pay off one’s debts. In essence, Chapter 13 Bankruptcy is for those that have some income left at the end of the month in which to make payments.
While there are other types of bankruptcies available (Chapter 11, Chapter 12 and Chapter 9), the above-mentioned types are most common. Even so, the best way to determine which options are best for you is to speak with a qualified bankruptcy lawyer that will give your case the focused attention it deserves.
Personal And Welcoming Service When You Cannot Pay Your Debts
At Gingold & Gingold, LLC, we’ve dedicated our firm to helping individuals throughout Georgia find the right bankruptcy solutions for their circumstances. When you call us, you’ll experience personal and welcoming service that will put you at ease. To speak with us in a private, confidential consultation, call or email today.