The need for a fresh financial start is sometimes one of the most pressing matters in a person’s life. If you’re in this position, you’re probably tired of the creditors calling you and sending you letters. Now, they can even send you private messages on social media and text you.
One option that you have is to file for bankruptcy. This gives you the chance to take care of your debts and start fresh. If you file a Chapter 7 bankruptcy, your non-exempt debts are liquidated so creditors can receive some payment for your accounts. If you file a Chapter 13 bankruptcy, you’ll have to make regular payments to the bankruptcy trustee to pay off a specific portion of your debts.
How does the court divide debts?
The court will divide debts into two categories – unsecured and secured. Unsecured debts are ones that don’t have any property or capital associated with them. Credit cards are one of the more common unsecured debts. Medical bills also fall under this category.
Secured debts are ones that have an asset attached to them. If you fail to make the payments, the creditor could repossess the asset to help cover the balance due to them. Car loans and mortgages are types of secured debts.
When you realize that you need to take control of your financial situation, you may decide to file for bankruptcy. Instead of trying to do this on your own, work with someone who knows about the laws and what the process entails. This may help you to get the bankruptcy done without having to worry about a lot of stress since you can draw on their knowledge.