There are two types of bankruptcy: chapter 7, in which assets are liquidated to pay off creditors and liabilities are discharged, and chapter 13, in which assets are retained and creditors are repaid over time. Regardless of whether you are filing for chapter 7 or chapter 13 bankruptcy, the decision is likely to be a difficult one, and you may need to consider your situation, options, and possibly seek competent legal counsel in order to reach a conclusion.
Chapter 7 bankruptcy is unquestionably a quick procedure; from filing to discharge, it may take between four and six months. Your bankruptcy attorney will present an accurate and factual assessment of your assets and liabilities to a court-appointed trustee in a meeting that is open to your creditors, and your non-exempt assets will be transferred to the trustee.
The trustee administers the estate and pays off the creditors with the proceeds from the estate's liquidation. A competent bankruptcy attorney can help you retain the majority of your assets and have a significant portion of your unsecured debts discharged.
The greatest aspect of filing for chapter 7 bankruptcy is that the law provides an automatic stay that prevents creditors from attempting to collect debts incurred prior to the filing. You will no longer receive annoying phone calls and letters from your creditors; it would be unlawful for them to harass you into repaying them, as you would be legally protected from such attempts to reestablish contact. In addition, you can discuss with your attorney ways to reduce or eliminate unsecured debt while retaining as many of your assets as possible.
If you do not qualify for chapter 7 bankruptcy, you may still petition for chapter 13 bankruptcy. In addition to providing advice, filing your petition in bankruptcy court, and representing you in court, a competent bankruptcy attorney can conduct negotiations with creditors to write off debts, acquire discounts, and renegotiate interest rates and payment plans.
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