It is difficult to stay afloat if you are drowning in debt. There are many reasons why people get in debt. In fact, it is easy for debt to grow in uncertain economic times. Some people have lost jobs and others may have emergencies. For instance, a medical crisis often leaves a family in debt, or the family car may need major repairs. One thing to do is meet with a chapter 13 bankruptcy lawyer in Bowie, MD. People should consider all options if they are faced with losing their vehicle or home.
The lawyer will discuss each potential client’s financial situation. Indeed, bankruptcy may not be for everyone. Likewise, chapter 13 may not be the way to go. Chapter 7 is a liquidation bankruptcy and is a better choice for people without a job. Nonetheless, a bankruptcy judge issues an automatic stay when a petition is filed. The automatic stay means that all collection activity must stop. This activity includes the harassing phone calls and legal actions. Chapter 7 usually lasts for three to six months. Initially, the court assigns a bankruptcy trustee who will liquidate some of the debtor’s property. The proceeds go towards paying creditors. Fortunately, each state has a certain amount of property that is exempt from the process. The chapter 13 bankruptcy lawyer in Bowie, MD will explain why some debtors cannot file chapter 7. For instance, those who make enough money to repay their debt must file chapter 13.
Some people call chapter 13 “the wage earner” bankruptcy because filers must have a steady income. Moreover, a large portion of their disposable income is taken each month to repay creditors. The chapter 13 bankruptcy lawyer in Bowie, MD works with the trustee to come up with a payment figure. Chapter 13 filers really have to tighten their belts. The bankruptcy lasts for three to five years, and during this time, there will not be a lot of extra money for eating out and other activities. However, filers get to keep their home and vehicle. The best thing about bankruptcy is that it gives people a fresh financial start.