It may be difficult to decide to file for bankruptcy. This is a big decision that has a long-term impact on the future. The process can halt pending lawsuits and wage garnishing. It can take time and a bit of money to file but for many it is worth in. Many residents of Virginia who are thinking about filing should seek the help of a Prince William County bankruptcy lawyer. A good lawyer knows the procedures to follow and which type of case must be filed.
Usually, one of two types is filed, a Chapter 7 or a Chapter 13. In a Chapter 7, all assets are liquidated to pay the debts. The remainder of the debts are then discharged. Homeowners in this situation will often have to give up their house and couples can lose their second vehicle. This can place further strain on a family that is already stressed.
Chapter 13 is a reorganization. With this form, many debts are satisfied by payments to a trustee for a period of several years. This form can allow individuals to keep assets that they might lose if they filed a Chapter 7. Payment amounts are determined based upon income, this can place a financial strain on filers.
Lawyers must be compensated for filing and handling a case. Often a flat fee is requested up front and the rest is included in the monthly payments. Monthly payments must be paid on time or the case can be dissolved. Creditors cannot harass the filer during this period.
Any debts remaining after the payments are made is discharged. The debtor is now free from responsibility for those debts. Any regular payments made, such as car payments or house payments, will continue as before unless the balance was satisfied.
Some debts are not allowed to be discharged. These include student loan debt and tax debts. There are times when student loans can be involved in a bankruptcy, but this is rare. There are other methods of dealing with student loans.
Student loan creditors offer extended payment plans for those who owe. Income based payments are also available. When a debtor has paid on their student loans for thirty years any amount left is written off. There are other ways of reducing this type of debt, such as filing for a disability waiver. Those who work for non profit agencies can have part of their loans forgiven. If a loan has gone to a collection agent, it still cannot be included in a filing.
A bankruptcy does have a significant impact on credit scores and can remain on a credit report up to ten years. A reorganization can result in the score actually rising during the payment period since regular payments are being made. Poor credit scores can result in difficulties purchasing a vehicle, becoming employed, or renting a home. There are companies that will work with people that have bad credit, however. Filing should be the last resort but can help those suffering from large amounts of debt.
Usually, one of two types is filed, a Chapter 7 or a Chapter 13. In a Chapter 7, all assets are liquidated to pay the debts. The remainder of the debts are then discharged. Homeowners in this situation will often have to give up their house and couples can lose their second vehicle. This can place further strain on a family that is already stressed.
Chapter 13 is a reorganization. With this form, many debts are satisfied by payments to a trustee for a period of several years. This form can allow individuals to keep assets that they might lose if they filed a Chapter 7. Payment amounts are determined based upon income, this can place a financial strain on filers.
Lawyers must be compensated for filing and handling a case. Often a flat fee is requested up front and the rest is included in the monthly payments. Monthly payments must be paid on time or the case can be dissolved. Creditors cannot harass the filer during this period.
Any debts remaining after the payments are made is discharged. The debtor is now free from responsibility for those debts. Any regular payments made, such as car payments or house payments, will continue as before unless the balance was satisfied.
Some debts are not allowed to be discharged. These include student loan debt and tax debts. There are times when student loans can be involved in a bankruptcy, but this is rare. There are other methods of dealing with student loans.
Student loan creditors offer extended payment plans for those who owe. Income based payments are also available. When a debtor has paid on their student loans for thirty years any amount left is written off. There are other ways of reducing this type of debt, such as filing for a disability waiver. Those who work for non profit agencies can have part of their loans forgiven. If a loan has gone to a collection agent, it still cannot be included in a filing.
A bankruptcy does have a significant impact on credit scores and can remain on a credit report up to ten years. A reorganization can result in the score actually rising during the payment period since regular payments are being made. Poor credit scores can result in difficulties purchasing a vehicle, becoming employed, or renting a home. There are companies that will work with people that have bad credit, however. Filing should be the last resort but can help those suffering from large amounts of debt.
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