It is important to consult with a bankruptcy lawyer before you file. This will help you understand your options fully and how they will impact you and your family both now and in the future. Selecting the right type of filing is the first step to achieving your financial goals and getting out from under your debts.
One of the first things we will ask during your consultation is what your goals are. Consider the financial goals you have for your family. This should include what you want your monthly budget to look like and what assets you want to keep or get rid of. We also need to know how much money you are making on a monthly basis and what your current expenses are aside from your debts. This will help us make an educated recommendation on how you should proceed.
As a bankruptcy lawyer, we can help with a Chapter 7 and Chapter 13 bankruptcy. There are major differences between the two and it is important to select the right one.
Chapter 13
A Chapter 13 filing is a good idea for people who want to keep the majority of their assets and pay back creditors over time. Many people don’t like the idea of liquidating everything so they would rather continue to pay off their debt in a way that is manageable on a monthly basis. We work with clients to create a monthly budget that is reasonable and affordable. This budget needs to take into consideration how much money you make after paying taxes, child support, rent or a mortgage, utilities, groceries, gas and incidentals. The remaining amount should be what you have available for making debt payments. Every monthly expense has to be calculated otherwise you will not be able to keep up with the arranged payment plans. If the trustee feels that your monthly budget is accurate they will look at your proposed settlement plan. In this scenario, your creditors will take a reduced amount overall while still getting something in return.
Chapter 7
This is a liquidation bankruptcy where your assets are sold to pay off your debts. This may include all of your assets including your home. However, as a bankruptcy lawyer we will request that certain assets like your home and car are exempt from liquidation. The trustee is likely to approve this as long as there is not a lot of equity in the property. If the equity in the property is enough to pay off a lot of your debts, it may need to be sold. This is an ideal situation for people that cannot possibly make debt payments and want to be free from the stress quickly. Once the bankruptcy is approved your creditors cannot come after you for additional payments.
To learn more about the various types of filings and what they can mean for your financial future, call the Travis Law Firm at (951) 274-9501.
