Because of bad business decisions, a bad marriage or even because of a bad economy, you are considering filing for bankruptcy to resolve your debt issues. The concept of bankruptcy may be a desired option by people who wish to end their debts and start clean again. However, filing for bankruptcy also has lasting issues, such as permanently damaging your credit, preventing you from purchasing a home or a car, and possibly making it hard for you to keep a bank account. The first thing to do before filing for bankruptcy is to speak to a certified bankruptcy lawyer to get a better picture for how dire your financial situation is. For instance, if you reside in Van Nuys, you may want to speak to a Van Nuys bankruptcy attorney for assistance.

Why file?

The overwhelming debt may have creditors harassing you, and you may find yourself stressed and without any rational means of repaying the debt. If you see that your minimum payments eclipse your monthly income, or if you are obligated to pay your bills on other credit cards, you may need to ask for help in order to solve your debt before it gets worse. Please understand, bankruptcy is not for everyone, and it is especially not for people who have accrued sizable amounts of debt due to unnecessary spending on trips, cars, clothes and other possessions the person may not need.

Types of Bankruptcy

People who are considering bankruptcy, do so under either Chapter 13 or Chapter 7 bankruptcy. Each kind of bankruptcy chapter helps aid people differently. If you register under Chapter 13 bankruptcy, you must have a steady income to get a court-approved repayment method. Chapter 13 may allow you to hold onto most of your possessions, such as your home and car, but you do have to promise to hand over some future income to make the payments on your debt. Chapter 7 varies in that it will eliminate most, if not all of your debt with the exception of any child support or alimony payments. Chapter 7 will appoint a creditor to remove all your current personal possessions and sell them to pay for any debt. No matter which type of bankruptcy you register for, you will be given a restraining order to hinder creditors from further intimidating you, and you will be required to attend mandatory credit counseling six-months after filing.

Visit an Attorney in your Area

Only by speaking to a local attorney, you will be able to understand if it is practical to file or not. Also, be sure to speak to an attorney in your area, meaning if you live in Woodland Hills, you will need to speak to a Woodland Hills bankruptcy attorney to gain a correct understanding of your available choices. Do not forget that each state also may have different rules regarding bankruptcy and only by talking to a local attorney can you get the best advice.