Bankruptcy is a legal process through which the debtor who is unable to pay to the creditor gets relief from some or all the debt. It is mostly imposed by the judicial courts. Bankruptcy offers the debtor the opportunity to get out from the debts which cannot be paid while being fair to the creditor.
Chapter 7- Discharge of Debts
It is a traditional type of bankruptcy in which the nonexempted property is surrendered by the debtor in order to pay the debt as much as possible. The other exempted property is kept, and the debtor is released from the obligation of paying the outstanding dischargeable debts.
The criteria to follow Chapter 7 should be fulfilled when the debtor should have insufficient income to pay the least portion of debts. If one, has an adequate amount of income to pay the debt, then one should file under Chapter 13.
Chapter 13- Payment Plan
In Chapter 13 of the Bankruptcy Code, the debtor does not look to get rid of the entire debt at once. This can be done by spreading the payments over a long period of time or by paying the considerable part of the loan at once. Either way, the amount of debt will be reduced and the repayment plan is negotiated up to three to five years.
Reorganization helps the debtor to pay the debt through a plan approved by the bankruptcy court. However, if the debtor fails to stick to the plan, the court may order the liquidation.
In today’s capitalist economy, people are prone to face financial crunch than any day else. Besides poor economic conditions; illness, accidents, divorce, and job loss have been piling the debt quickly and leading the debtors at the doorstep of professional bankruptcy lawyers Colorado inhabits.
Benefits of Filing Bankruptcy
The main advantage of bankruptcy is eliminating the debts. One is not required to repay the debt that has been discharged. Furthermore, it leads to automatic stay preventing creditor to take any action against you. This also puts an end to the constant badgering of creditors through repeated phone calls, letters, personnel coming home. Besides, it helps you to eventually improve your credit score.
Hiring a Pro
A piece of professional advice is a must when dealing with bankruptcy, as the other debt consolidation agencies can be misleading. Working with a pro is suggested for filing bankruptcy, as it being a tedious exercise involving a lot of paperwork and potential to mistake, which is beyond an average person to tackle it alone. The attorney hired should meet you directly and discuss your case rather than some paralegal or clerk.
The attorney decides whether to file bankruptcy in your case or not and if yes, then what type of bankruptcy should be filed. They ensure that your property is safe, all debts are released, and creditors do not violate your rights.
With the expert advice and correct information, declaring bankruptcy gives your finances the footing you need for the new beginning. In other words, hauling down the flag may be the fresh start for financial recovery.
Bankruptcy is federal protection helping you get rid of your debts, create feasible repayment plans or change the terms of debt. By following the right advice in the right situation can give you the much-needed respite from the debt and stress.
The expert bankruptcy lawyers Colorado ensures your bankruptcy procedure to go as soon as possible and complies with relevant rules and regulations governing the proceedings.