Nobody enjoys being in debt. Once contemplated, high debts can drive people deep into desperation and despair, to the point where declaring bankruptcy seems to be the best and only option. If this describes you, it’s critical that you have all the facts before deciding to take the plunge.
Dischargeable Debts
The first thing to understand when considering bankruptcy is that not all debts may be dismissed. Filing a bankruptcy petition automatically puts most debt collections on hold. Bankruptcy can eliminate personal loans, medical bills, credit card payments and the like. Meanwhile, tax obligations, alimony and student loans especially are notoriously hard to get rid of even through bankruptcy. Whatever debts you have, discuss them with a bankruptcy attorney Edmonds WA before beginning the bankruptcy process.
Understanding Exemptions
On the other hand, even bankrupts are allowed to maintain a certain amount of money and essential assets for a basic standard of living. While bankruptcy is technically a federal matter, different states have different rules on what and how much bankrupts can keep. A lawyer in your state will know and be able to explain the relevant laws to you. However, you can feel fairly secure that you won’t lose your home, your primary vehicle for transportation or any necessary equipment you own for work due to bankruptcy.
Bankruptcy Types
Diverse forms of bankruptcy exist for debtors in various financial states. Chapter 7 bankruptcy is the simplest, also known as “straight bankruptcy.” Chapter 7 is what most people imagine when thinking about bankruptcy. Chapter 13 is similar but, instead of being discharged outright, debt is restructured into a court-approved payment plan which debtors are obliged to follow. Other options are available for specific kinds of debtors. An attorney can choose your ideal solution and plan a reasonable course of action to advance your case.
If you’re even entertaining the possibility of bankruptcy, don’t delay. Contact a lawyer today for answers to potentially life-altering questions.
