Is Bankruptcy Right for Me?

Get Answers From a Charlotte Bankruptcy Attorney

You may be wondering: “Is bankruptcy right for me?” There are many complexities that must be acknowledged when evaluating whether bankruptcy is right for you. Many individuals have misconceptions about the process of bankruptcy. There are, however, many benefits to bankruptcy. That does not mean that bankruptcy is right for you. At the Law Office of Jack G. Lezman, PLLC, we can provide you with a free case evaluation to assess whether this is the proper procedure for your financial situation. Our Charlotte bankruptcy lawyers can also discuss any alternatives to bankruptcy that might be available to you.

What Are the Benefits of Bankruptcy?

If you are overwhelmed with debt, bankruptcy may be right for you. You may be wondering: “Is bankruptcy right for me?” You should familiarize yourself with the benefits of bankruptcy to determine if it can help your situation.

Bankruptcy can eliminate your debt

If you have significant debts that you cannot pay on your own, bankruptcy will give you a method of eliminating the majority of your debt. Although not all types of debt can be eliminated, most of your debt can be managed through bankruptcy.

Bankruptcy can stop foreclosure and repossession

If you have a notice of foreclosure or repossession, you can stop the process with an automatic stay through bankruptcy. Once you file bankruptcy, all collections processes are paused for a certain amount of time. You will have time to gather the funds to manage the situation or set up additional payment options with those creditors.

Creditor collection efforts will pause

An automatic stay will also stop all collection efforts by other creditor. If you are being harassed by creditors who call and send mail constantly, all that can stop when you file bankruptcy. Your bankruptcy will then manage those debts so those creditors never contact you again.

You can keep most of your property

Although some property must be returned to creditors and others must be sold to pay debts, you can keep much of your property through bankruptcy. Many homes and cars are exempt from bankruptcy, so you will be able to reaffirm that debt and keep your property after bankruptcy.

You may be able to restructure payments for property

If you are having trouble making payments on your home, car, and other property, you may be able to renegotiate payment plans through bankruptcy. Creditors are often open to setting up a more manageable payment plan when a debtor files bankruptcy.

Wage garnishment will stop

If a creditor is garnishing your wages to obtain payments, bankruptcy will stop that garnishment. If you contact an attorney early enough, you may be able to prevent garnishment altogether.

Creditor lawsuits will be paused

If a creditor has filed a lawsuit against you or is threatening a lawsuit, then you can pause that legal action through bankruptcy. Your creditors will, instead, have to handle your debt through the bankruptcy instead of suing you through court.

A skilled bankruptcy attorney can review your situation and help you understand what bankruptcy benefits can help you. If you are wondering: “Is bankruptcy right for me?” then you should speak with an attorney right away. The sooner you get professional advice, the quicker you can begin taking advantage of bankruptcy benefits.

Should You Choose Chapter 7 or Chapter 13 bankruptcy?

Even if you’ve answered the question of “is bankruptcy right for me?” positively, you may be unsure of whether Chapter 7 or Chapter 13 is right for you. By knowing the difference between these types of bankruptcy, you can determine which is right for you.

  • Chapter 7 Bankruptcy – This is often called “liquidation” bankruptcy, as most or all your debts can be eliminated quickly through Chapter 7. However, you must qualify for this type of bankruptcy through an income-based means test. Further, all your debts must be dischargeable in order to eliminate them. Chapter 7 can take four to six months to complete.
  • Chapter 13 Bankruptcy – This is often called “reorganization” bankruptcy because it restructures your debts into manageable payment plans. If you don’t qualify for Chapter 7 through the means test, you will likely be able to file Chapter 13. Debts that are not completely paid through the payment plan may be discharged at the end of your bankruptcy. The payment plan can take three to five years to complete.

Both of these bankruptcy methods can result in the elimination of your debt and a clean slate. However, there are many differences that must be considered when determining “is bankruptcy is right for me?” You should evaluate the type of debt you have, the amount of time each bankruptcy type takes, and your income level before making a decision.

You should work with a skilled bankruptcy attorney when choosing between Chapter 7 and Chapter 13. A lawyer can evaluate your specific situation and help you make a choice that will result in the best outcome possible in your situation.

Qualifying for Bankruptcy

Even if you decide that bankruptcy is right for you, it can be difficult to know if you qualify. Both Chapter 7 and Chapter 13 have requirements that must be met in order to qualify for each type of bankruptcy.

For Chapter 7, you must meet the requirements of a means test. This test will evaluate your income and assets. If you make too much money or have too many assets to qualify for Chapter 7, then you may still have other options. There are certain situations where you may be able to skip the means test and automatically qualify depending on your characteristics. A skilled lawyer can help you understand if you qualify for Chapter 7 with or without the means test.

For Chapter 13, you must be able to repay your debts and your debt cannot exceed certain amounts. However, if you do not make enough money or have enough expendable income, then you may not qualify for Chapter 13. If you have business debt that does not qualify for Chapter 13, you also may not be able to file with that debt. If you have too much of certain kinds of debt, those debts may not be eligible for the payment plan.

Even if you don’t qualify for Chapter 7 or Chapter 13. A bankruptcy lawyer can help you answer the question: Is bankruptcy is right for me?

When Bankruptcy May Not Be Right for You

The bankruptcy process can help you get your finances on track, but there are certain circumstances with a Chapter 7 or Chapter 13 bankruptcy may not be best. If you want to file for Chapter 7 or Chapter 13 bankruptcy, you may have to reconsider if you are in any of the following circumstances. You:

  • Have recently obtained a bankruptcy
  • Had a past bankruptcy case dismissed
  • Had a cosigner on a loan
  • Defrauded your creditors
  • Expect to incur more debts
  • Recently obtained debts for luxuries

There are some circumstances, such as the above, that should be taken into consideration. You should also consider which of your debts are non-dischargeable under Chapter 7 bankruptcy. If your primary goal is to eliminate these non-dischargeable debts, this process may not be right for you. You should also take into consideration how much property you will have to give up.

Contact a Lawyer When Considering Whether Bankruptcy Is Right for You

It is essential to obtain legal help from a Charlotte bankruptcy attorney who understands the process. Knowing which type of bankruptcy is best for your situation is essential, which is why the means test is a vital part of the process. Speak with one of our attorneys at the Law Office of Jack G. Lezman, PLLC We can help you determine whether bankruptcy is right for you, so contact our firm today!

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