Bankruptcy is a viable choice for anyone who has overwhelming debt and needs help to pay it off. The court will review the claim according to the chapter the claimant chooses. They could eliminate a high volume of their debts and get their finances on track.
What Is an Automatic Stay?
The automatic stay is protection against legal action by creditors, and the claimant is protected as long as they are in bankruptcy. If they do not pay off all debts in the case, they are still responsible for the debts unless the judge discharges the account in bankruptcy. After the automatic stay has ended, the claimant is not protected against legal action, and they will need to start making payments to any creditor whose account was not paid off.
How Long Do the Cases Last?
The chapter 13 bankruptcy claims last between three and five years, and the chapter 7 cases last between three to six months. The court will decide how long it will take to complete each case based on the debt volume or the total amount of assets the court is selling for the claimant.
Can They Settle All Their Debts?
It is possible for the consumer to settle all their debts if they have enough assets to sell in chapter 7. As for chapter 13, it just depends on how much the consumer can pay each month on their debts and whether or not three to five years will give them enough time to pay off the debts. Consumers can learn more about each chapter of bankruptcy start by contacting Kania Law Office for more information now.
Should They File for Bankruptcy Again?
If the claimant has remaining debts after their bankruptcy is discharged, they could file a new claim to prevent their debts from becoming overwhelming. If a repayment plan helped them manage their debts, they could get more help from a new claim. It could also prevent their debts from accumulating more interest that makes them unaffordable. Their attorney can provide them with advice about the debts and give them the help they need.
How Does Bankruptcy Affect Their Credit?
The bankruptcy will remain on the consumer’s credit for up to ten years. All the accounts they paid off during bankruptcy will be removed from their credit history, and they will increase the consumer’s credit points. However, the consumer will have a difficult time getting any new lines of credit, and they will not be able to buy a home for several years. It is recommended that they participate in credit rebuilder programs to improve their credit scores. They will also need to pay off debts that were not included in their bankruptcy claim.
Claimants can get the help they need by filing for bankruptcy. With bankruptcy, claimants have the option to liquidate their assets through chapter 7, or they can start a repayment plan through chapter 13. Each option could be helpful to consumers. Claimants can find out more about the cases by contacting an attorney now.