Determining that you need to file for bankruptcy isn't something that most people do easily. When you realize that you have overwhelming debts, you might find that you need to do something. It is all too easy to think about the bankruptcy process itself when you are deciding what to do; however, you also need to consider the aftermath of the filing.
An automatic stay offers immediate relief in bankruptcy
The events leading up to having to file for bankruptcy often include having to deal with multiple creditor phone calls per day and harassing letters. This is disheartening and can lead to emotional turmoil. When you file for bankruptcy, you will receive an automatic stay that prevents creditors from being able to contact you about the debt.
Chapter 13 has benefits and drawbacks for you to consider
Filing for bankruptcy protection is one step you can take to reclaim your finances when things get out of hand. One form of bankruptcy that you might file is a Chapter 13. This is often referred to as a working man's bankruptcy because you will be required to make payments on the case based on a schedule issued by the court.
Chapter 7 bankruptcy has pros and cons
Filing for bankruptcy is a huge deal because there are pros and cons that you might have to deal with as part of the process. When you aren't able to make payments on the bankruptcy-related debts, you might need to file a Chapter 7 bankruptcy. This is also known as a liquidation bankruptcy because your nonexempt assets are liquidated in an effort to pay off as much of the debt as possible.
Understand the ins and outs of Chapter 13 bankruptcy
When you have the assets or income that exceed the means test that is used to determine eligibility for Chapter 7 bankruptcy, you might end up filing for Chapter 13. This is often referred to as the working man's bankruptcy because it includes a repayment plan that is based on your income and expenses.
