Thompson Law Group, P.C.

Legal help is crucial when considering filing for bankruptcy

Financial problems in for Pennsylvanian can occur for a variety of reasons in their personal and professional life. While it might seem like an act of avoiding one's responsibilities and not paying what is owed, bankruptcy is a useful strategy to get back on stronger financial ground, clear many debts, keep a home and a motor vehicle, or get a business into a better situation to move forward. Understanding which bankruptcy chapter is preferable for the individual situation, which debts can be eliminated, and how bankruptcy can be beneficial is imperative before taking the next step.

There are different types of bankruptcy. Chapter 7 is useful for those who have a great deal of unsecured debt like credit card debt and do not have possessions worth significant value. It can be used to get rid of that debt without the requirement to pay it back. This will negatively impact a credit score, but those who successfully file for Chapter 7 can rebuild their credit as time passes and they are in a better financial situation.

Chapter 13 is called a wage-earner's plan and is useful for those who own a home, a vehicle and other property they would not like to be subjected to a liquidation as it would be under Chapter 7. With Chapter 13, people will formulate a repayment plan that will last three or five years and they can retain their property provided they make the payments on time and in full. After the time has expired and they have paid as much as they can, they are clear of their debts. Chapter 11 is generally used to reorganize a business and keep it in operation.

For those who are considering bankruptcy as an alternative, they must know the various rules for the different chapters, the information that must be provided and other factors. A lawyer who is well-versed in the bankruptcy process can be of assistance with filing for bankruptcy and which chapter is preferable. To gather all this information, it is crucial to discuss the matter with an attorney as soon as possible.

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