The decision to file bankruptcy is a very difficult decision because of what it may entail. Yes, it is a possible discharge or restructuring of your debt. However, there are credit consequences and the possibility that some of your assets could be seized to satisfy some of the debt you owe your creditors.
But do not let the technical aspects of bankruptcy scare you. when you are having to decide between food and keeping a roof over your head, you know that you need to do something. Fortunately, the law allows you to have your debt partially or completely forgiven so that you can move on with your life and start over.
Signs It’s Time To File
Many individuals ask themselves whether or not they should file. As a matter of fact, they struggle with the decision for years before they actually do. Sometimes, the decision is finally made when they find that the credit cards they have used to pay other credit card bills have run out of available credit and now the collections departments are calling them.
Here are some signs that it is time to seek a Minneapolis bankruptcy attorney and file bankruptcy:
- You are using credit cards to pay bills
- You are using credit cards to buy groceries
- You have accounts that are in collections
- You are facing foreclosure and/or repossession of a car
- You are facing wage garnishment
- Interest rates have gotten out of hand due to a couple of late payments
- Despite the payments you send, the fees that are accumulating keep you over your limit
If any of these signs resemble your situation, you do need to speak to a bankruptcy lawyer. Your lawyer will inform you of your options and provide you with the necessary information, including the fact that you do need to complete a credit counseling course as a part of your filing and a certificate issued by the approved credit counselor that states you completed counseling.
Types Of Bankruptcy
There are two main types of bankruptcy for individuals. They are Chapter 7 and Chapter 13. In order to file Chapter 7, you have to have no disposable income left each month to satisfy all of your bills. This means you are living beyond your means. You are allowed to have assets up to certain dollar amounts. These are called exemptions. For instance, your car cannot be worth a certain amount before it is seized to satisfy a debt. The same goes for furniture, tools of the trade, and other assets within your home.
Chapter 13 is different in that it is more of a restructuring of debt. If you have some disposable income, but not enough to pay all of your bills, you will be placed on a payment plan. This payment plan is constructed in a way that you will satisfy anywhere between 10% and 100% of your debt over a 36 to 60 month period.
Both have credit consequences. Bankruptcy remains on your credit report for 10 years. However, it is possible to obtain credit in 2 to 3 years after your bankruptcy has been discharged. Interest rates may be higher, but the point is that you do have the opportunity to start over before your bankruptcy is removed from your credit report.
Twin Cities Bankruptcy Lawyer & Attorney
If you are considering filing bankruptcy, it is most likely because you are having a great deal of financial strain and you need a way to start over. There are many reasons why individuals must file and it is nothing to be ashamed of. You deserve to live life without the bill collectors disrupting it. To learn more about how bankruptcy can help your unique situation, call us at 612-206-3777 for a free consultation where you can receive answers to your questions and have an idea of what you need to do to help yourself financially.