Over the last few years, many people have given in to temptation of living way beyond their means and using credit as the vehicle to transport them to a higher living standard. People in this situation notice that their debt continues to increase as the minimum payment on their bills continues to grow. They end up in a situation where they are living paycheck to paycheck. Reality sets in when an unexpected financial disaster comes into their life and the decision needs to be made whether to eat or pay the creditors. Many times it's a medical expense not covered by insurance or even take it a step further, a job loss and losing your medical insurance where no expenses are covered. In this circumstance the only way out is filing for bankruptcy.
In the past, people used to bring up old phrases like debtors prison or homelessness, when thinking of individuals being bankrupt. Nowadays, making the decision to file bankruptcy no longer carries the mark of shame of yesteryear. Individuals still worry that Chapter 7 bankruptcy still can be associated with failure. In most cases, bankruptcy is not just the result of people not handling their credit responsibilities. Usually, a bankruptcy filing results from circumstances that are out of a person's control.
After deciding to file, most people still don't know the real differences between Chapter 7 and Chapter 13 bankruptcy. When people think of bankruptcy, people think of a repo man auctioning off all of the family's possessions while the family ends up penniless. Hearing the word bankruptcy most people think of chapter 7. This chapter of bankruptcy is the quickest and most drastic type which allows the debtor to discharge all their unsecured debt with the debtor ending up debt free. Chapter 13 on the other hand, allows debtors to keep all of their property by negotiating a 3 to 5 year court-approved payment plan. Any debts left over at the end of the payment plan are usually discharged in a Chapter 13 bankruptcy.
Filing bankruptcy for the first time can be a stressful and emotional experience. Debtor's emotions are pushed to the limit because of fear and shame, making the decision to file bankruptcy extremely hard. Finding a bankruptcy attorney that you trust can be invaluable to relieve the stress and to instill confidence in the US bankruptcy system. It's important to get consultations from multiple attorneys to find one that fits your situation best. Most bankruptcy attorneys offer a free consultation to evaluate your case. Getting a fresh start and removing unbearable debt should be a driving force to get a bankruptcy discharge. Becoming debt-free will feel like the weight of the world will be removed from your shoulders.
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