Are you considering bankruptcy due to overwhelming financial obligations? Are you worried that you may have to sell your assets in order to keep your head above water? You are not alone. Every year, millions of Americans become so financially distressed that they have to consider filing for either Chapter 7 or Chapter 13 bankruptcy.
These two forms of personal bankruptcy are vastly different. A Chapter 7 bankruptcy, also called a liquidation bankruptcy, results in the sale of all major assets by a trustee to repay the obligations owed. In Chapter 13 bankruptcy, also known as partial bankruptcy, debts are settled for an agreed upon amount and the borrower enters into a repayment plan to satisfy the creditors.
Filing for bankruptcy under Chapter 13 of the bankruptcy code is not meant for everyone. If you are planning to use the Chapter 13 of the bankruptcy code to file for bankruptcy, you have to be prepared to part with some or all of your money in order to repay your debts, in case you are financially able to do so. Chapter 7 of the bankruptcy code may require you to surrender your property and liquidate it in order to be able to repay your debts.
In order to know whether you are eligible to declare bankruptcy under Chapter 7 or Chapter 13 of the bankruptcy code, you need to seek out the advice of a bankruptcy attorney and an experienced appraiser from Lexington Appraisals, who can help you obtain an accurate home valuation. Moving forward after filing for bankruptcy can be both painful and challenging.
So, how can you survive after filing a Chapter 7 or a Chapter 13 bankruptcy?
- Stay in touch – Stay in touch with bankruptcy team throughout this process. Your lawyer and appraiser will provide expert support and familiarize you with the trustee reports, appraisal documents, proof of claims, and any other communications that you receive from the court.
- Master your paperwork – After filing for bankruptcy, make sure you go through all the paperwork and master it. Be sure everything is completed with as much detail as possible. When you are summoned to the court, any missing information could delay or hurt your case. For instance, if you leave a creditor out, the court may not discharge that debt. Gather all your financial records and statements and keep them organized, so that you can access them whenever you need information from them.
- Live within your budget – A budget is essential to rebuilding your financial life—it gives you direction and a plan to follow as you generate new income. If you file for bankruptcy under Chapter 13, most of your disposable income will probably go to paying off your debts.
- Adapt quickly to changed circumstances – After a major life event, things can get out of control financially, even if you’ve stuck to your budget. Make sure you let your trustee know of any changes in your life, such as the loss of a job due to illness or a loan taken against a mortgage, through your attorney.
If you change your mind about switching the code under which you have filed for bankruptcy, it is not a bad thing. Consult your attorney and Lexington Appraisals to ensure the route you’ve chosen is the best possible strategy for your situation.