What Exactly Is Bankruptcy?

 Posted on March 22, 2023 in Bankruptcy Options

If you are struggling with overwhelming debt, you may have been encouraged to start researching what filing for bankruptcy entails. Yet, it does not make much sense to begin researching the ins and outs of the bankruptcy process until you have a strong sense of exactly what bankruptcy is and whether this opportunity may benefit your situation uniquely.

Bankruptcy Is a Form of Debt Relief

The two primary forms of personal bankruptcy that are widely available to adults living throughout the U.S. are Chapter 7 bankruptcy and Chapter 13 bankruptcy. At the end of each successful bankruptcy case – regardless of the chapter type involved – a filer’s qualifying unsecured debts will be discharged by the court.

When a discharge is entered for a specific debt, like a credit card balance or a medical bills account, the filer is absolved of responsibility for that debt. As a result, no creditor can ever seek repayment for it again. It is this absolute form of debt relief that makes navigating the complexities of the bankruptcy process worth many filers’ time and energy.

Bankruptcy Can Also Be a Form of Debt Management

Anyone who does not meet the low-income thresholds for Chapter 7 bankruptcy is likely only eligible to file for relief under Chapter 13 of the U.S. Bankruptcy Code. In a Chapter 13 case, a filer works with an attorney to construct a 3-to-5-year repayment plan.

Per the terms of this plan, the filer will make a single, manageable monthly payment that will be applied to their consolidated debt. Additionally, many filers are able to renegotiate the terms of their secured loans in favorable ways as part of this restructuring process.

By restructuring debt in this way, a filer will still need to repay much of their non-dischargeable debt – and probably some of their dischargeable debt – but the process will make repayment far more manageable than it would otherwise be.

Contact a Dedicated San Antonio Bankruptcy Lawyer to Learn More

You do not need to feel any pressure to file for bankruptcy without first understanding all you need to know about the process and how filing for bankruptcy could impact your life. By connecting with a knowledgeable San Antonio, TX bankruptcy lawyer at Law Offices of Chance M. McGhee, you can gain a much stronger sense of what to expect. That way, you can make informed decisions about your legal options with greater confidence.

To schedule a confidential case evaluation at no cost, feel free to either reach out via our firm’s contact page or to call us at 210-342-3400. When it comes to regaining genuine control over your finances, knowledge is power. By speaking with our team, you can become empowered to utilize whatever debt management and/or debt relief resources that can help you to reach your financial goals. We look forward to meeting with you.

Source:

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics