The decision to file bankruptcy is one that is never made lightly. Although the process can stop wage garnishment and lawsuits, the process can be time consuming and costly. Some Virginia residents who wish to file should contact a Prince William County bankruptcy lawyer. These professionals know the proper procedures to follow and can determine which kind of case should be filed.
There are generally two types that individuals can file, Chapter 7 or Chapter 13. Chapter 7 is considered a liquidation. All assets of the individual or couple are sold to pay outstanding debts and the remainder of the debts are discharged. This is not always a good choice for homeowners, as homes are often an asset that is sold. Couples may have to give up any cars they own besides their primary vehicle. This can place further hardship on the family.
A Chapter 13 case is a reorganization of debts. This form allows homeowners to keep their homes as long as they continue to make timely payments. Payments are spread out over several years and are paid to a trustee. The amount paid is based upon the income of the couple or individual. Payments can become a strain if a period of unemployment should occur. However, a lawyer can request a modified plan.
Lawyers must be compensated for filing and handling a case. Often a flat fee is requested up front and the rest is included in the monthly payments. Monthly payments must be paid on time or the case can be dissolved. Creditors cannot harass the filer during this period.
Any debts remaining after the payments are made is discharged. The debtor is now free from responsibility for those debts. Any regular payments made, such as car payments or house payments, will continue as before unless the balance was satisfied.
Some debts are not allowed to be discharged. These include student loan debt and tax debts. There are times when student loans can be involved in a bankruptcy, but this is rare. There are other methods of dealing with student loans.
Most student loan servicers allow debtors to request a forbearance or other extension on time to pay. It is also possible to make payments based upon income. After thirty years of payments, the remainder of the loans is often written off. Other methods of removing student loan debt include working for a non-profit agency for several years and claiming permanent disability. Often, even student loans that have been sent for collection cannot be written off.
Bankruptcy does damage the individual's credit rating and can remain on their credit report for ten years. In some cases, such as a Chapter 13, credit scores can actually go up since the person is making regular payments. A poor credit score can result in difficulty finding a place to rent, buying a car, or getting a job. However, there are many places that will work with those who have a poor credit score. Filing should be a last resort but it is a breath of fresh air to those struggling with garnished wages and lawsuits.
There are generally two types that individuals can file, Chapter 7 or Chapter 13. Chapter 7 is considered a liquidation. All assets of the individual or couple are sold to pay outstanding debts and the remainder of the debts are discharged. This is not always a good choice for homeowners, as homes are often an asset that is sold. Couples may have to give up any cars they own besides their primary vehicle. This can place further hardship on the family.
A Chapter 13 case is a reorganization of debts. This form allows homeowners to keep their homes as long as they continue to make timely payments. Payments are spread out over several years and are paid to a trustee. The amount paid is based upon the income of the couple or individual. Payments can become a strain if a period of unemployment should occur. However, a lawyer can request a modified plan.
Lawyers must be compensated for filing and handling a case. Often a flat fee is requested up front and the rest is included in the monthly payments. Monthly payments must be paid on time or the case can be dissolved. Creditors cannot harass the filer during this period.
Any debts remaining after the payments are made is discharged. The debtor is now free from responsibility for those debts. Any regular payments made, such as car payments or house payments, will continue as before unless the balance was satisfied.
Some debts are not allowed to be discharged. These include student loan debt and tax debts. There are times when student loans can be involved in a bankruptcy, but this is rare. There are other methods of dealing with student loans.
Most student loan servicers allow debtors to request a forbearance or other extension on time to pay. It is also possible to make payments based upon income. After thirty years of payments, the remainder of the loans is often written off. Other methods of removing student loan debt include working for a non-profit agency for several years and claiming permanent disability. Often, even student loans that have been sent for collection cannot be written off.
Bankruptcy does damage the individual's credit rating and can remain on their credit report for ten years. In some cases, such as a Chapter 13, credit scores can actually go up since the person is making regular payments. A poor credit score can result in difficulty finding a place to rent, buying a car, or getting a job. However, there are many places that will work with those who have a poor credit score. Filing should be a last resort but it is a breath of fresh air to those struggling with garnished wages and lawsuits.
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