Are you stressed out due to harassing calls from creditors? If so, think about bankruptcy as a solution to financial problems. There are different types of consumer bankruptcy, and one of them may work for you.
Preliminary Issues
Anyone who files for bankruptcy must have credit counseling. The counseling can be done online and does not take a lot of time. The government wants to make sure consumers consider all options. Next, the court issues an automatic stay when the petition is filed. This means creditors must cease collection activities.
Chapter 7
Filers need to consult a Bankruptcy Lawyer In Puyallup Wa before filing. They will make sure the debtor can live with the bankruptcy plan. Indeed, Chapter 7 filers must lose a certain percentage of their assets. That is because the court can liquidate many assets to repay debts.
However, some assets are exempt depending on where the filer lives. For instance, debtors are allowed to keep a portion of the equity in their home. Further, cash values in insurance policies and retirement plans are exempt. In addition, filers may keep up to $1,000 worth of jewelry and the contents of the home.
Not All Debts Can Be Discharged
The Bankruptcy Lawyer In Puyallup WA informs clients about what debts can be discharged. For example, child support in arrears must be paid. Further, federal income taxes and student loans must be repaid.
The Wage Earner’s Bankruptcy
Chapter 13 is known as the wage earner’s bankruptcy. That is because filers must have a steady monthly income. The lawyer works with the court to formulate a Chapter 13 repayment plan that includes most debts. Mortgage and vehicle loan arrears will be included in the plan.
Filers are able to keep their home and car as long as the current payments are made. Likewise, filers must remit the monthly bankruptcy payment. It can be difficult to live with a Chapter 13 plan because most of one’s disposable income is spent.
Anyone living with a Chapter 13 must learn to live frugally for a while. Indeed, Chapter 13 plans are spread over three to five years. In the end, it is well worth the struggle to have a clean financial slate.
