Sometimes, it is altogether too easy to let debts build up until they become too high for you to pay off. When this happens, there does exist a way to resolve such an overwhelming financial situation – filing for bankruptcy. Once you begin the bankruptcy process, you will experience a number of benefits right away. First of all, all processes of repossession, foreclosure, and creditor harassment will be immediately halted. Secondly, certain debts you have will be discharged.
When debts are said to be discharged, this essentially means that they are eliminated. A person with discharged debts is released from his or her legal obligation to pay back the money that is owed. When you file for bankruptcy, therefore, you will likely benefit from a number of debt discharges.
Depending on the type of bankruptcy you file – either Chapter 7 or Chapter 13 – your debts may be affected in different ways. Filing for Chapter 7 will eliminate your unsecured debts. This means that all money you owe that is not backed by property (like a car payment or a mortgage) will be discharged. Unsecured debts typically include credit card payments and hospital bills, among others.
Filing for Chapter 13, on the other hand, may not affect your unsecured debts in the same manner. Under this plan, you are required to repay all secured debts over a period of time – 3 to 5 years – and when that is complete, you will be granted discharges. You may still be required to pay back some, or even all, of your unsecured debts, depending on your situation.
If you are struggling with your finances and believe that filing for bankruptcy is the right solution for you, then the Birmingham bankruptcy lawyers of [firm-name] can help. To speak with us about your situation, contact our offices today by dialing [phone-number].