When Debt Leads to Bankruptcy

Everyone has times in their lives where they can run into financial difficulty. Perhaps there is job loss, an economic downturn, or a serious illness that caused your debt to spiral out of control.

Bankruptcy is an option when you need to get your life back under control. There are two different types of bankruptcy to meet your needs as individuals. You will need to consult a bankruptcy lawyer Rockville MD to determine which one is right for your needs.

Chapter 7 Bankruptcy

Chapter 7 is a liquidation bankruptcy. It will take care of getting rid of your unsecured debts that can come from medical bills or credit cards. There are income requirements for this type of bankruptcy, as it is primarily for low-income debtors who have limited assets.

A helpful aspect of this type of bankruptcy is the automatic stay placed on your debt that prevents your creditors from pursuing collections actions while you are going through the filing process

Chapter 13 Bankruptcy

Chapter 13 is a reorganization bankruptcy. It is for those creditors who have regular income with enough money left over each month to pay back a portion of their debt through a repayment plan. Your bankruptcy lawyer Rockville MD can help you prepare your case. While Chapter 13 takes three to five years to complete, the major benefit is being able to keep your property through the repayment plan.

Conclusion

Only you can know if your debts are out of control and if you need a fresh start. When you are ready to take that step, your first call should be to bankruptcy lawyer Rockville MD to go over your individual options. You should be prepared for that first appointment with your financial information. You should be able to show how much you make, and have a complete listing of your debts ready for their review.

Everyone needs a little help now and then, and there is no shame in having to pursue bankruptcy to get out of debt. This can be the fresh start you need in order to confidently move forward in your life.