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Should You Call A Bankruptcy Lawyer Today?
The goal of most any personal bankruptcy is to discharge or bankrupt your existing debts and allow you a *fresh start* on your finances. In other words, once your discharge is granted, you no longer need to repay the debts that were incurred before you filed your bankruptcy. Your creditors are entitled to share in the proceeds obtained from the liquidation of your non-exempt assets. Under Chapter 7, the amount your creditors will get is fixed by the value of your non-exempt assets.
Technically, the word "bankrupt" is not the correct terminology when referring to getting rid of debts, but most people use that phrase. "I want to bankrupt my credit cards or bankrupt my student loan debts". The correct legal term is "discharge". You discharge your obligation to pay on debts. Throughout this webpage, that is the term that will be used to describe getting rid of (bankrupting) debts in bankruptcy.
Certain debts are non-dischargeable in a Chapter 7. Examples of these are alimony and child support obligations, taxes less than three (3) years old, student loans (with the sole exception listed below), and any debts procured by fraud (fraud debts may be dischargeable in a Chapter 13), incurring debt without a reasonably certain ability to repay the debt, and so forth.
Assuming you need to file a bankruptcy, the only way to determine which Chapter to file under is to first compare your options under the other available Chapters (with the assistance of a bankruptcy attorney). Generally, Chapter 7 is the cheapest, quickest and least burdensome of the three major Chapters (the others being 11 and 13) of bankruptcy law. Costs and fees vary depending on the number of creditors you have, complexity of your case, and other factors. Click here to prepare for and schedule a free phone consultation.
If you are an individual, and meet the requirements, Chapter 7 allows you to discharge most or all of your debts. It allows you to do this regardless of how many assets you have or how much your creditors ultimately receive. It basically allows you to walk away from your debts and start over.
Corporations do not receive discharges of debts, but there still may be some benefit to allowing a trustee to liquidate the assets.
Filing For Bankruptcy in NYC: The New Trend
In the last five years, over 2 million individuals filed for bankruptcy. Millions more are in serious financial jeopardy. Economists estimate that for every family that declares bankruptcy, there are seven more that should based on their debt load.
Credit card abuse, for the most part, is a myth perpetuated by the credit card companies. The truth is the majority of individuals and families in financial trouble can be directly linked to circumstances beyond their control: the loss of a job, a medical crisis, or a family crisis such as a death or divorce.
And while bankruptcy is one avenue for dealing with debt issues, there are other alternatives.
Whatever you decide to do, DO NOT FALL for "consolidation" or "credit repair" schemes.
Generally, letting a property go into foreclosure or conducting a 'short-sale' are both ineffective and potentially destructive choices to your credit when considering your property status.