If you have reached a point where your debt is out of control, it may be time to talk to a bankruptcy attorney. They can help you figure out if bankruptcy is the right choice for you and which type you can and should file. There are four types of bankruptcy but by far the most common are Chapters 7 or 13.

Chapter 7 is known as a liquidation plan. Your case is turned over to a trustee who liquidates any assets that are not exempt and distributes the funds to your creditors. If you have no assets to liquidate, you can still have your debts discharged. There is some debt that will not be discharged no matter the type of bankruptcy such as child support, alimony or punitive damages/court ordered restitution. Chapter 13 is a way to reduce your debt, keep your home and vehicle and allow you to catch up on the payments over time. You will formulate a repayment plan based on your ability to pay over a 3-5 year period. The items that are exempt vary from state to state and some states allow you to follow their list or opt to follow the federal list of exempted items. These generally include pensions, insurance policies, some personal property and one vehicle per adult of a certain value. It is never an easy prospect to declare bankruptcy but with the help of a bankruptcy lawyer you can get through this. There are new requirements that you must follow such as, credit counseling prior to filing and you must attend a financial skill’s workshop before your bankruptcy can be discharged. Chapter 7 bankruptcies are generally discharged within four months of the filing date and Chapter 13 are discharged after the repayment plan has been completed. You cannot file for Chapter 7 again for six years after your original filing date but Chapter 13 can be filed again at any time. When you have reached the point when you cannot face the mailbox, answer the phone, your facing repossession or foreclosure bankruptcy may be the answer. It is a stressful time and you have to lay your financial life bare for the courts but it does end eventually and you get a fresh start and a chance to start rebuilding your credit. Having a good attorney by your side makes the whole prospect just a bit earlier. They take care of notifying creditors and all the legal requirements.

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