You have probably heard the word bankruptcy quite a bit. The word often has a negative connotation, and many people don’t really know a lot about what a bankruptcy really is. People often have a vague idea that it is something you go through when you have too much debt, are out of money, and need some extra help. Some people are under the false impression that bankruptcy means all your debts are forgiven and you don’t have to worry about them. Others assume that filing for bankruptcy will destroy their credit for the rest of their lives. While there is some truth hidden in both these viewpoints, neither of them give your a very good picture of what bankruptcy actually does. Reading and researching bankruptcy and contacting a bankruptcy attorney in Binghamton can give you a much better idea of what bankruptcy is all about.
Different Bankruptcy Chapters
There are different kinds of bankruptcy that you can file, and each will have a different set of codes and will require different things from you. As an individual, you will really only have a choice between Chapter 7 and Chapter 13 bankruptcies. Other chapters involve bankruptcies in corporations, cities, and countries. In a Chapter 7 bankruptcy, your assets are liquidated and the proceeds are divided between your creditors. Some assets can be exempt form this process. It is important to consult with an attorney to better understand what assets can be exempt and what will need to be liquidated. An attorney can also help you petition for exemptions. If liquidation does not cover your debts in full, many debts can then be forgiven. Chapter 13 bankruptcy provides for the adjustment of debts as long as you are making a reliable income. Interest rates may be adjusted in this situation, and monthly payments can be reduced. An attorney can help you decide what kind of bankruptcy is best for your situation.
Not All Debts Are Equal
While bankruptcy can certainly help you reduce your debt, not all debts can be forgiven. You can get out of credit card debt, you can stop debt collectors form harassing you, and you can eliminate certain liens, but there are some debts you will not be able to get out of. While you may be forgiven of the debt to a creditor, if that creditor has a lien on your property, then bankruptcy cannot stop your creditor from repossessing the property. Student loans cannot be forgiven except in very rare and extreme circumstances. You also cannot get out of child support and alimony payments that you are responsible for. Most tax debts are also exempt and cannot be forgiven, though an attorney may be able to help you reduce fees.
You Can Put Bankruptcy behind You
Many people are very nervous about the thought of filing for bankruptcy. Many people have nightmares about never being able to own a house or establish credit again. While it is true that filing for bankruptcy can be a serious blow to your credit, it will not ruin your credit for the rest of your life. If you are responsible and dedicated, you will be able to build your credit back up, and it will probably be faster than you think. The need to file for bankruptcy can be caused by all kinds of situations, often not through any gross lack of responsibility on your part. Working with a good bankruptcy attorney in Binghamton can help you understand more about the process and feel more comfortable in this difficult situation.