Why most people fail at bankruptcy
Most experts advise individuals to file for personal bankruptcy as last alternative. There are two options, one is Chapter 7 liquidation, designed for people with no or little disposable income. Most debts are wiped out and allows you to start fresh. The other option is Chapter 13 reorganization, designed for people with more disposable income and overwhelming debt. It allows consumers to prevent foreclosure on their homes and receive some breathing room from creditors, but most debts must be repaid in 3-5 years. Call bankruptcy attorney near me.
In some cases, Chapter 13 reorganization can be converted to Chapter 7 liquidation, usually when person’s financial circumstances have worsened. However, converting to Chapter 7 doesn’t relieve you from your debts. You’ll still need to pass the means test, taking into consideration your family size and location to evaluate your ability to pay some of your debts.
After bouncing back, cleaning up your credit report is pretty hard. If you got debt discharged, the credit entry is noted as discharged in bankruptcy.
More often, people who file for Chapter 13 bankruptcy don’t fully understand what they are signing up. They don’t understand that they are getting themselves into a repayment plan, where a lot of things can happen over time. When their financial circumstances change, maybe lose their job, they skip payments. When too many payments are missed, the trustee will ask the court to dismiss the bankruptcy case. Now, the creditors can again start seeking foreclosure or repossession. Moreno law firm help you understand the whole process.
Bankruptcy filing damages credit scores and carries a stigma, but that’s not the end of it. Bankruptcy is definitely not a bad thing. There are people who need it absolutely, and it is there for that reason. Your finances might seem bleak. But if you can persevere through the bankruptcy process, your debts will be cleared and your credit score will improve. That will place you in a better financial shape. For more information call bankruptcy attorney moreno valley ca.