Is Filing for Bankruptcy a Worthwhile Effort?

 Posted on July 31, 2023 in Bankruptcy

When an individual or a family is facing a truly overwhelming debt load, every effort at addressing the issue can feel a bit like a band-aid on a bullet hole. Negotiating better loan terms with a single creditor, for example, can take an extraordinary amount of effort and can ultimately yield very little benefit aside from temporary relief of an overdue payment or two and the knowledge that one’s repayment date has been moved to a more convenient time of the month, or what have you. One of the primary benefits of bankruptcy, by contrast, is that it tends to serve as a more comprehensive solution to complex debt challenges that span more than one account.

How Does Bankruptcy Work?

Whether you opt to file for Chapter 7 or Chapter 13 bankruptcy, you will need to work with an attorney to prepare detailed information about your income, debt, and assets for the court to review. You will be required to participate in two educational experiences – one as a pre-filing requirement and one before your case is closed – and you will attend a meeting with the trustee assigned to your case.

If you choose to file for Chapter 7 relief, your qualifying unsecured debts will be discharged within a few months and unless some of your non-exempt assets are sold to repay your creditors (a rare occurrence), you will not be expected to pay your debts down before benefiting from a discharge. In a Chapter 13 case, your debt will be restructured so that you make a single, manageable debt repayment each month directly to the court, which will distribute your funds to your creditors per the terms of your plan. At the end of your three-to-five-year repayment plan, your remaining qualifying unsecured debt load will be discharged.

What Benefits Can Filers Expect from the Process?

The primary benefit associated with bankruptcy is a discharge of all qualifying unsecured debts, including credit card balances, medical bills, and personal loans. Additional benefits include:

• A temporary halt to creditor actions – including foreclosure – via an automatic stay
• The ability to address accounts that are consistently overdue, which can save filers from late fees, penalties, and hit after hit to their credit score
• A financial “fresh start” that allows filers to start rebuilding their credit and financial stability

Receive Personalized Feedback from a San Antonio Bankruptcy Lawyer

Because your financial situation is unique, the debt relief and debt management solutions that work for others may or may not work well for you. Filing for bankruptcy may be an excellent option for you, but it is a good idea to seek personalized legal feedback before committing to this consequential course of action. By calling 210-342-3400 or reaching out to the Law Offices of Chance M. McGhee online, you can schedule a risk-free, confidential case evaluation with a reputable San Antonio, TX bankruptcy lawyer at no cost. Once you are empowered by personalized professional feedback, you can make informed choices about the options that are right for you.

Source:

https://www.lendingtree.com/bankruptcy/pros-and-cons-of-filing-for-bankruptcy/