Should I File Bankruptcy?

Bankruptcy gets a bad rap. For many, it smacks of failure. Or it may conjure up images of celebrities and athletes who’ve squandered their riches and suffered disgrace in the public eye. But is bankruptcy only an option for the truly desperate, or for people with no other options?

If you are struggling under crushing debt, bankruptcy could give you the financial fresh start you are looking for. But it’s only in your best interest to file if you understand what bankruptcy can and cannot do, as well as which bankruptcy chapter best suits your needs and circumstances.

To learn more about whether bankruptcy is right for you, speak to a Charlotte NC bankruptcy attorney at the Law Office of Jack G. Lezman, PLLC today.

How Can Bankruptcy Help You?

For many, bankruptcy provides a way to get out of debt and start fresh. If you owe more to creditors than you can pay them, bankruptcy can free you from harassing creditor calls and allow you to discharge your debt or pay it back in a payment plan.


Bankruptcy can also temporarily stop foreclosure or repossession of your property. As soon as you file bankruptcy, you are granted an “automatic stay”. This legally bars your lenders from contacting you to collect on mortgages or auto loans you have defaulted on.

Wage Garnishment and Collections

Similarly, bankruptcy is right for you if you are facing wage garnishment, collections, or a creditor lawsuit. The automatic stay you receive when you file bankruptcy will stop nearly all collection attempts, lawsuits, and garnishments. Bankruptcy can also result in the elimination of the underlying debt.

Assess Your Debts and Assets

To determine whether bankruptcy is right for you, start by assessing your assets. Inventory your retirement accounts, investments, securities, bonds, homes and cars, and other accounts. Next, determine how much you owe. Add up all your bills and other debts.

If your assets are worth less than the debts you owe, bankruptcy may be right for you. However, be aware that bankruptcy will lower your credit score for years. This will impact your ability to buy a house or car, or start a business.

You should also be aware that bankruptcy will not eliminate all types of debt. Most credit card, medical bill, and personal loan debts can be discharged through bankruptcy. However, alimony and child support, tax debt, and student loans are not affected.

Should I File Bankruptcy Chapter 7 or Chapter 13?

These are the two types of personal bankruptcy most commonly used by individuals, depending on the type of debt you owe and assets you own.

When Chapter 7 Is Right for You

Chapter 7 bankruptcy works if you don’t have many assets. If you do have assets, Chapter 7 can still work provided they can be protected with exemptions. State law allows you to exempt certain types and amounts of property from being sold to compensate your creditors.

Chapter 7 is the right choice if most of your debt is dischargeable. Only certain types of debt can be discharged, including credit card and medical bill debt. Chapter 7 also works if your income is low enough to fall below a certain threshold.

Chapter 7 is a quick, relatively simple way to gain a fresh financial start. However, nearly all of your assets will be liquidated to pay your debts. So, if you own a business, properties, or other cherished personal property, Chapter 7 might not work for you.

When Chapter 13 Is Right for You

Chapter 13 bankruptcy allows you to repay all or some of your debt under a three to five year plan. It is a better option if you have a house or car you want to save from foreclosure or repossession. It is also more advantageous for those who have nondischargeable debt, including child support or tax debt.

Chapter 13 bankruptcy works if your income is too high for Chapter 7. Your income must be consistent and predictable enough to support a Chapter 13 repayment plan. In addition, to qualify for Chapter 13 bankruptcy, the amount you owe cannot exceed a certain limit.

What Can You Do Now?

The first thing to do if you are in financial trouble is speak to an experienced bankruptcy lawyer. Filing for bankruptcy can be complicated and nerve-racking if you go it alone. With the help of an attorney, you will have the security of knowing you have a professional in your corner. They can guide you through every step of the process starting with determining whether bankruptcy will work for you.

Charlotte Bankruptcy Attorney Can Help You Determine Whether Bankruptcy Is Right for You

If you’re considering bankruptcy or want to learn more about your options, speak to a bankruptcy attorney. At The Law Office of Jack G. Lezman, PLLC, we can help you assess your situation and advise you as to how you can find debt relief. Contact us today to learn more.

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