Home Money & Finance Bankruptcy and Why You Should Go For It

Bankruptcy and Why You Should Go For It

by Olufisayo
What is Bankruptcy

Before going to the details about bankruptcy and how to choose a reasonable attorney, it’s crucial you know the meaning of the term bankruptcy.

What is Bankruptcy?

This is a legal proceeding that involves a business or person who is unable to settle their debts. A debtor files a petition, then the debtor’s assets are evaluated, and these could be used to repay the outstanding debts or a portion of it.

The essence of bankruptcy

Bankruptcy allows you to start again by forgiving debts that you’re not able to pay, and your creditors can obtain a measure of payment based on the assets that can be liquidated.

Federal courts led by federal judges handle bankruptcy cases in the US. In addition, a trustee administers over bankruptcy cases. This is an officer in the department of justice appointed to represent the debtor in the proceedings.

Why file for bankruptcy?

This may be a question that has lingered in your mind for long. It’s a wise idea if you are in serious debt. It’ll stop repossession, foreclosure, or even wage garnishment. It will help you keep more property as you discharge the debt.

       

See below why you need to file for bankruptcy.

When the bank is foreclosing your home or property

Bankruptcy will help you stop a foreclosure. Once you file it, you have an automatic stay that prohibits creditors or lenders from continuing their recovery actions against you. It makes you immune to any foreclosure proceedings.

According to chapter 7, if you file before the foreclosure end, then bankruptcy wipes out your entire mortgage debt.

When the lender is coming for your car

The automatic stay you get in bankruptcy puts a halt to all the lender’s attempts to repossess your car. You can catch up on this in Chapter 13 by including back payments in your plan applying both chapter 13, and you may get back your vehicle if it was repossessed recently.

All you should do is talk to a bankruptcy attorney here https://baylegal.com/practice-areas/bankruptcy/, and they walk you through the process.

       

After moving to a state with unfavorable exemptions

You don’t have to surrender all your property in bankruptcy. Every state has a pack full of exemptions that you can use to keep your property. If you happen to move to another state and your previous state’s exemptions don’t seem to work, it’s prudent you apply for bankruptcy. Your ‘domicile’ will determine the available state exceptions.

If you’ve moved recently, you’ll most likely be allowed to use your previous state’s exemptions.

When your landlord is threatening an eviction

Sometimes, things go south, and you’ve to cling to whatever works for you. When the landlord has threatened to evict you, you should immediately file for bankruptcy. Time here is of the essence; otherwise, if you delay and obtain a court order, then bankruptcy may not work.

Filing bankruptcy to stop a lawsuit

When someone is suing you for car accident damages, credit card debt, or even a breach of contract, bankruptcy will come in handy in stopping the lawsuit. That means it’s more prudent to have the debt discharged than defending such lawsuits.

Bankruptcy is something that will come to your rescue when you are deep in debt, and you’re threatened with all manner of lawsuits and eviction. Just get a reputable bankruptcy attorney to advise and guide you through the process.

       

Photo by Towfiqu barbhuiya from Pexels

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