As we grow older, many of us accumulate debts that prevent us from reaching our goals or finding financial stability. This is an important issue for anyone to consider, because it can impact a borrower for the rest of their life, and may even affect how they distribute their property to others after they pass away.
Bankruptcy offers some of the strongest tools available to consumers in America. With careful planning, a thoughtful bankruptcy can offer a borrower a fresh start when no one else will do so. Depending on the nature of the debt, assets and income of the borrower, bankruptcy may not even require sacrificing many belongings.
If you suspect that bankruptcy may be an option in your circumstances, be sure to use high-quality legal resources as you review your circumstances and build a bankruptcy strategy. With careful planning, you may find that the benefits of bankruptcy surprise you.
Do you need to forfeit personal property in bankruptcy?
Bankruptcy is a broad term that refers to several procedures. Not all individuals who apply for bankruptcy qualify for all types of bankruptcy, so it is wise to examine your circumstances carefully before choosing the type of bankruptcy to fit your needs.
Chapter 7 bankruptcy typically requires borrowers to forfeit property in return for debt discharge. Chapter 7 requires uncomfortable sacrifices, but it is available to more individuals, making it a strong choice for those with few other options.
On the other hand, individuals with enough income may qualify for Chapter 13 bankruptcy, which does not always require forfeiting assets. Under Chapter 13, a bankruptcy court approves a borrower's structured repayment plan, using their existing income. If the borrower sticks with the repayment plan and pays off their debts using their existing income, they may never have to forfeit belongings at all.
Which type of bankruptcy fits your needs?
To make the most of the financial and legal tools that you have available, you must carefully review the options available to you. Bankruptcy is a powerful tool that you must tailor to your own needs for ideal results.
Taking time and effort to build a strong legal strategy before beginning the bankruptcy process ensures that your rights remain secure while you use the strength of the law to shed untenable debt and gain a clean financial slate.