Filing for bankruptcy is one smart option when you can no longer handle your debts. This is particularly true when you have significant amounts to settle. When you file for bankruptcy, you can save yourself from your financial struggle and be in a better state to handle things from this point on. Most importantly, this step can be the key to a fresh start that you badly need.
Chapter 7 bankruptcy, for instance, can save you from liabilities from particular types of debt. Bankruptcy attorneys in Salt Lake City emphasize that while filing for it may sound too technical and complicated, it’s important to realize its practical importance when dealing with mismanaged debts. Start by knowing the key points that make it a smart solution. Here are a few things you need to know about filing for Chapter 7 bankruptcy.
It is court-supervised
The court supervises the process of filing for a Chapter 7 bankruptcy. The court will advise and guide you through the entire process. If you want a less stressful and faster filing, you have the option to hire a legal advisor to represent you before the court. There are law firms and legal professionals who specialize in this kind of bankruptcy, so take advantage of their services.
You must meet certain criteria
Not everyone is qualified to file for bankruptcy. Income, for instance, is one of the main criteria in determining your qualification. To become a good candidate for filing, your local court must determine if your current income cannot cover your current debts. Otherwise, you might need a Chapter 13 debt consolidation.
It can affect your credit
One of the most important things to keep in mind is that filing for bankruptcy can affect your future credit. This is why you have to know if the benefits of filing outweigh the effects of a poor credit score. It is also worth emphasizing here that credit scores can be significantly improved by taking some actions and that it does not stay that way forever. In cases where you have to pay major debts (like medical bills due to a surgery and a car accident claim) all at the same time, it makes better sense to file.
Consider what to do with properties
Bankruptcy will most likely influence you to make big decisions, so you have to be prepared in taking the necessary steps. This is especially true when you have a property or two that are pledged as collateral. You can either redeem, reaffirm, or surrender them, depending on which option you think is the most practical.
Property redemption means you have to pay the creditor the amount equivalent to the property’s replacement value. If you choose to reaffirm, you have to follow the agreements specified in the contract. If you decide to surrender, it means the creditor will take the property.
Conclusion
Sometimes, filing for bankruptcy is the smartest thing to do. This might be difficult for some, but it pays to realize that this could be the best way to manage debts during financially trying times. There is nothing to worry if these things are new to you. You can seek the help of a bankruptcy attorney so you can succeed in this undertaking.
