What is bankruptcy? Declaring Chapter 7 or 13

Bankruptcy, is the act of officially declaring that either you can not pay your debts. Or, that you can not pay as contracted with your creditors. Bankruptcy has evolved and changed much over the years and now is quite a complex undertaking. There are many rules, laws, regulations and procedures that must be followed to declare bankruptcy. In the old days a person declared bankruptcy by loading his possessions onto the family wagon, pulled in to the town square and left it — his creditors then took the possessions. Now you must file a lengthy petition after meeting certain qualifications.
Debt Relief Attorneys
If you are having money problems you may need to consider bankruptcy in order to get debt relief. However, no matter how much research you do on the internet, you should never file bankruptcy without the counsel and assistance of a bankruptcy attorney.

The basic traditional determination that a person is bankrupt involves one of two scenarios

1) your monthly living expenses and debt payments significantly exceed your monthly income on a regular basis and/or 2) your total debt far exceeds the value of your assets. Another indicator that you may need to file bankruptcy is your inability to repay your debt, in particular unsecured debt, within a reasonable period of time. Of course there are other debt relief options available such as debt repayment programs which mimic a Chapter 13 bankruptcy plan. However, bankruptcy is the only court supervised and enforced option to obtain relief from debt and credit problems.

For the typical individual consumer there are two options available under the US Bankruptcy Code

Chapter 7 which is also known as complete or liquidation bankruptcy and Chapter 13 which involves a court ordered and court supervised repayment plan over a period of up to five years. Of course there are substantial differences between chapter 7 and 13 which need to be explored and discussed with your bankruptcy attorney.

Ultimately bankruptcy is a debt relief option which can help you save your home from foreclosure, help you obtain a fresh start, and/or allow you to discharge your unsecured debt as well as select secured debts with certain exceptions. Bankruptcy is very complicated and really should only be undertaken with the assistance of an attorney. If you are overwhelmed by your debt and considering your options submit your information to a bankruptcy attorney for a no obligation case evaluation to see if bankruptcy (chapter 7 or 13) is an option for you.