Can Bankruptcy Be a Useful Resource for Financial Hardships?
Debt Collection Lawyer Tampa, FL
The topic of bankruptcy is not often taken lightly, as having such a status can have an impact on your finances for many years to come. While it can be a great resource for those in severe financial hardship, this doesn’t mean it’s for anyone who has debt. Here we have answered a few questions pertaining to bankruptcy, including those who could benefit from applying, who will receive notification about your new status, and the difference between bankruptcy chapters:
Q: Is the best option to overcome debt to file for bankruptcy?
A: Those who are in debt, may not have to apply for bankruptcy. For some people, all it takes is improving money management skills to be able to start paying back outstanding debts. But for others, it may be true that they simply do not make enough money to cover all of their living expenses plus monthly debt payments. If you are not sure whether bankruptcy is right for you, a debt collection lawyer Tampa, FL offers at The Law Office of Michael A. Ziegler Law, P.L. can provide advice based on your current personal financial situation.
Q: Who will be informed about my bankruptcy status?
A: Bankruptcy is filed through your local court, so your application will be considered public record. But, this does not necessarily mean your friends, family and employer are going to find out. In fact, it is often the applicant who tells loved ones and coworkers themselves. The instance in which an employer may find out about this financial status, is if your wages must be garnished due to a late payment while operating under chapter 13 bankruptcy. Lastly, it is required that credit companies you hold accounts with are informed about your bankruptcy filing.
Q: Is it possible that my creditors will take actions against me?
A: After filing for bankruptcy, your creditors are not permitted to contact you asking for payments. A creditor may take action through pursuing a meeting with you or object to the bankruptcy filing altogether. If a credit company files an objection, it can have an impact on your bankruptcy application.
Q: What are the most commonly used bankruptcy chapters?
There are four different types of bankruptcy filings, including chapter 7, chapter 11, chapter 12 and chapter 13. The most commonly used chapters are chapter 7 and 13. Chapter 13 allows the applicant to pay off his or her debts over the course of around 3-5 years through monthly installments. These payments are often calculated based on the person’s earnings, and what is left over after necessary expenses are paid (such as rent, food, medication, utilities). Chapter 13 can be a helpful option for those who want to keep their possessions.
Chapter 7 is the opposite, where a person does not pay back the debts through monthly payments. Instead, the applicant may have a portion of their belongings relinquished or sold off in order to amend a debt. If someone is not attached to tangible items and would rather just get rid of at least a portion of their debt, may want to operate under chapter 7.