The decision to file bankruptcy is one that is never made lightly. Although the process can stop wage garnishment and lawsuits, the process can be time consuming and costly. Some Virginia residents who wish to file should contact a Prince William County bankruptcy lawyer. These professionals know the proper procedures to follow and can determine which kind of case should be filed.
Most commonly, individuals file one of two types of bankruptcy, either a Chapter 7 or a Chapter 13. Chapter 7 allows for the liquidation of assets in order to satisfy debts. What is not paid for is then discharged and the debtors responsibility to those creditors has ended. Homeowners are not always advised to file a liquidation as this usually results in the loss of their home. Other assets including vehicle or boats are often sold. Loss of a second car can place further stress on a family.
The process of reorganization is conducted by filing a Chapter 13. Many of the debts owed are paid for through monthly payments. These are paid to the trustee for the state. This allows the debtor to keep some property such as homes and a second car. Payments are income based and can be modified later in the plan if needed.
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.
Most student loan servicers allow debtors to request a forbearance or other extension on time to pay. It is also possible to make payments based upon income. After thirty years of payments, the remainder of the loans is often written off. Other methods of removing student loan debt include working for a non-profit agency for several years and claiming permanent disability. Often, even student loans that have been sent for collection cannot be written off.
The bankruptcy process can damage an already fragile credit rating. It also remains on the credit report for up to ten years. A reorganization can help because regular payments are being made. Low credit scores can impact an individual's standard of living because it can make it difficult to buy a new car or rent an apartment. There are special companies who work with bankruptcy filers who need credit. Although taking this step is hard, it can offer relief to those burden by excessive debt.
Most commonly, individuals file one of two types of bankruptcy, either a Chapter 7 or a Chapter 13. Chapter 7 allows for the liquidation of assets in order to satisfy debts. What is not paid for is then discharged and the debtors responsibility to those creditors has ended. Homeowners are not always advised to file a liquidation as this usually results in the loss of their home. Other assets including vehicle or boats are often sold. Loss of a second car can place further stress on a family.
The process of reorganization is conducted by filing a Chapter 13. Many of the debts owed are paid for through monthly payments. These are paid to the trustee for the state. This allows the debtor to keep some property such as homes and a second car. Payments are income based and can be modified later in the plan if needed.
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.
Most student loan servicers allow debtors to request a forbearance or other extension on time to pay. It is also possible to make payments based upon income. After thirty years of payments, the remainder of the loans is often written off. Other methods of removing student loan debt include working for a non-profit agency for several years and claiming permanent disability. Often, even student loans that have been sent for collection cannot be written off.
The bankruptcy process can damage an already fragile credit rating. It also remains on the credit report for up to ten years. A reorganization can help because regular payments are being made. Low credit scores can impact an individual's standard of living because it can make it difficult to buy a new car or rent an apartment. There are special companies who work with bankruptcy filers who need credit. Although taking this step is hard, it can offer relief to those burden by excessive debt.
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