Are you struggling with debt and considering bankruptcy? Well, filing for bankruptcy will not only enable you to wipe your financial slates clean but also end countless calls from your creditors.
Declaring bankruptcy can prevent creditors from repossessing your property, shutting off your utility services, or withholding your paycheck.
Also, filing bankruptcy will allow the bankruptcy court to approve a plan that'll enable you to pay off your debts slowly, liquidate some of your assets to pay creditors, or even discharge your debts entirely.
Bankruptcy Filings are Creeping Up
There was an increase in bankruptcy filings early this year, and the number of new cases has continued to increase exponentially over the past few months. Since the pandemic, the government aid programs have helped keep families and businesses afloat.
However, the aid packages are drying up and bankruptcy filings are starting to creep up in 2022. According to Epiq, the total number of new consumer bankruptcies filed in March grew by 33.5%. Consumer filings increased by 34% and commercial cases shot up by 26%.
Choosing the Right Bankruptcy Chapter
According to the federal Bankruptcy Code, there're six chapters of bankruptcy. However, many people file either Chapter 7 or 13.
Here's a short explanation to help you understand the differences between Chapter 7 and Chapter 13 bankruptcy:
Chapter 7 Bankruptcy: It is the most common type of bankruptcy case and the filers' first choice. It is also faster and cheaper. This liquidation bankruptcy allows the court to sell all your assets for cash to help you pay off your debts. You're only allowed to keep assets that are exempt from sale under federal law.
Chapter 7 bankruptcy can help you clear most of your debts, especially if your assets consist of the essential items needed to survive. However, it won't work well for individuals with more assets. Chapter 7, unlike chapter 13, doesn't have a good payment plan to help you catch up on late mortgage or car payments - meaning that you could lose them.
Chapter 13 Bankruptcy: Offers a repayment plan for filers with regular income. It enables you to keep your property while paying off your debts for a period of 3 to 5 years. With Chapter 13 bankruptcy, you can force your creditor into a payment plan.
Even though Chapter 13 provides benefits not available in Chapter 7, it may be more expensive if you can't keep up with the monthly payment.
Do I Need to Seek Modifications to My Chapter 13 Repayment Plan?
If you're having a hard time making payments on your chapter 13 repayment plan, it may be worthwhile to request changes to the plan. This can reduce your payments.
To modify your plan, you must alert the court in advance. Your bankruptcy trustee and creditors will also have to review the amended plan.
If you serve the new plan to the trustee or creditor and they object to it, they'll have to explain their position to the court – then the judge will make a decision.
Get Help Filing for Bankruptcy Now
Are you overwhelmed by debt and considering bankruptcy? Worry not, we've got you covered. At the Law Offices of James C. Shields, our team of experienced and knowledgeable lawyers will not only advise you but also help you with your bankruptcy.
We assist people with all probate matters because we understand very well how a simple mistake can result in your case being dismissed. We are compassionate, professional, and we guarantee our work.
We help people who cannot pay their debts explore their bankruptcy options and alternatives they may have. Bankruptcy law is very complicated and may discourage you from filing your case. Our law firm will proudly represent you in all phases of your bankruptcy claim. Reach out to us today. We offer payment plans, and our fees are reasonable.