March 28th, 2012 by Kayce
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When faced with rising debt and bankruptcy it’s important to make sure that everything is done to secure a good outcome. This can involve dealing with lawyers and exploring various options for either repaying the debts or filing for bankruptcy.
The aim is to protect the assets of the debtor from what the creditors are claiming. To do this, all possible means of dealing with the debt should be explored – including the possibility of filing for bankruptcy.
How does this work?
To understand how bankruptcy options can protect you and your property, you need to know what those options are, and how to use them. With the right legal advice you can find a way that will give the greatest amount of protection, while saving your property.
Two types of bankruptcy in the United States.
- Chapter 7 is by far the most common and is usually started by the debtor. In this situation, the assets are sold to meet the cost of the outstanding debt. The advantage is that once it is filed, the creditors can’t contact the debtor. There is a strict criteria for this type and it needs issuing by a court. Only a qualified legal representative can help you meet this. This one is usually used by those with few assets. Once the debts are met, then all the other assets are safe.
- Chapter 13 is not as common, but with this option, the assets are protected as onus is put on the ability to repay the debt. This can be done as you garnish your salary to meet the payment needs of the creditors. This option is often taken by those who have assets like rental properties that give an income but there’s a short fall for whatever reason. There is a qualifying criteria for this type of bankruptcy that a good lawyer can help you with.
Both protect property
It is possible to go bankrupt, but keep your home, however the level at which the two chapters outlined above protect your home are different and it is best to get good legal advice from an experienced bankruptcy lawyer who can help you navigate the legal process involved.
Getting the right legal advice from a good lawyer will give you the right options when working to save your properties. It will open many legal doors that you may not be aware of.