The decision to file a bankruptcy case should not be done in haste. Many debtors seek relief from lawsuits and wage garnishments and filing can help but the process can be lengthy. Virginia residents who want to file might see the help of a Prince William County bankruptcy lawyer. These pros know exactly what to do in this situation. They can assist with determining which type the individual should file based upon their personal situation.
There are generally two types that individuals can file, Chapter 7 or Chapter 13. Chapter 7 is considered a liquidation. All assets of the individual or couple are sold to pay outstanding debts and the remainder of the debts are discharged. This is not always a good choice for homeowners, as homes are often an asset that is sold. Couples may have to give up any cars they own besides their primary vehicle. This can place further hardship on the family.
The process of reorganization is conducted by filing a Chapter 13. Many of the debts owed are paid for through monthly payments. These are paid to the trustee for the state. This allows the debtor to keep some property such as homes and a second car. Payments are income based and can be modified later in the plan if needed.
Regardless of the type of bankruptcy filed, there are fees to be paid to the lawyer handling the case. This is usually carried out by paying an initial retainer and the rest of the fees are included in the bankruptcy payments. Monthly payments should be paid every month and on time. Creditors cannot harass the debtor during the bankruptcy period.
After payments or the waiting period is complete, the remaining debt is discharged. This frees the debtor from further responsibility for the debt. Payments that were made during the payment period, such as mortgage payments, will continue as before.
Certain debts are not allowed to be discharged, such as tax bills and student loans. Only occasionally are student loans discharged. These types of debts must be handled differently.
Student loan servicers are good about extending a forbearance to debtors. This allows the borrower more time to pay. Payments can also be reduced depending upon the individual's income. After thirty years the remaining debt is written off. Those who work for a non-profit agency for a few years can also have student loan amounts reduced as well as individuals who are permanently disabled. Even student loans that have been sold to a collection agent usually will not be discharged.
Bankruptcy does damage the individual's credit rating and can remain on their credit report for ten years. In some cases, such as a Chapter 13, credit scores can actually go up since the person is making regular payments. A poor credit score can result in difficulty finding a place to rent, buying a car, or getting a job. However, there are many places that will work with those who have a poor credit score. Filing should be a last resort but it is a breath of fresh air to those struggling with garnished wages and lawsuits.
There are generally two types that individuals can file, Chapter 7 or Chapter 13. Chapter 7 is considered a liquidation. All assets of the individual or couple are sold to pay outstanding debts and the remainder of the debts are discharged. This is not always a good choice for homeowners, as homes are often an asset that is sold. Couples may have to give up any cars they own besides their primary vehicle. This can place further hardship on the family.
The process of reorganization is conducted by filing a Chapter 13. Many of the debts owed are paid for through monthly payments. These are paid to the trustee for the state. This allows the debtor to keep some property such as homes and a second car. Payments are income based and can be modified later in the plan if needed.
Regardless of the type of bankruptcy filed, there are fees to be paid to the lawyer handling the case. This is usually carried out by paying an initial retainer and the rest of the fees are included in the bankruptcy payments. Monthly payments should be paid every month and on time. Creditors cannot harass the debtor during the bankruptcy period.
After payments or the waiting period is complete, the remaining debt is discharged. This frees the debtor from further responsibility for the debt. Payments that were made during the payment period, such as mortgage payments, will continue as before.
Certain debts are not allowed to be discharged, such as tax bills and student loans. Only occasionally are student loans discharged. These types of debts must be handled differently.
Student loan servicers are good about extending a forbearance to debtors. This allows the borrower more time to pay. Payments can also be reduced depending upon the individual's income. After thirty years the remaining debt is written off. Those who work for a non-profit agency for a few years can also have student loan amounts reduced as well as individuals who are permanently disabled. Even student loans that have been sold to a collection agent usually will not be discharged.
Bankruptcy does damage the individual's credit rating and can remain on their credit report for ten years. In some cases, such as a Chapter 13, credit scores can actually go up since the person is making regular payments. A poor credit score can result in difficulty finding a place to rent, buying a car, or getting a job. However, there are many places that will work with those who have a poor credit score. Filing should be a last resort but it is a breath of fresh air to those struggling with garnished wages and lawsuits.
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