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Bankruptcy Attorney Salt Lake City UT

Bankruptcy Attorney Salt Lake City UT
Bankruptcy Attorney Salt Lake City UT
Bankruptcy Attorney Salt Lake City UT
Bankruptcy Attorney Salt Lake City UT

Bankruptcy Attorney Salt Lake City UT

If your debts have become unmanageable and you feel there is no other way out, you may be wondering if bankruptcy is your next logical step. While it’s true that nobody wants to leave their financial fate in the hands of the courts, there are times when bankruptcy may be the only solution.
Bankruptcy is a formal legal process that can help absolve consumers of some of their debts or reorganize their debts so they can reasonably be paid off. Different types of bankruptcy can lead to different outcomes, and the unique types of bankruptcy are also geared toward different types of consumers. Most consumers who file for bankruptcy do so with the aid of a bankruptcy attorney. Either way, bankruptcy begins when a debtor files a petition for bankruptcy with a bankruptcy court. Individuals can file for bankruptcy on their own, and couples can file together. Businesses can file for bankruptcy using their own separate processes.

Types of Bankruptcy

There are two main types of bankruptcies for consumers to consider, each of which can make sense depending on a consumer’s financial situation.

Chapter 7 bankruptcy

With Chapter 7 bankruptcy, property is sold and the proceeds are used to pay off debts. This type of bankruptcy is usually pursued by consumers who do not earn enough money to repay the debts they have.

Chapter 13 bankruptcy
With a Chapter 13 bankruptcy, some unsecured debts may be forgiven. However, remaining debts are reorganized and set up to be repaid over a specific length of time (usually three to five years). This type of bankruptcy is often utilized by consumers who earn enough to repay their debts but need assistance and a fresh start.

How Bankruptcy Works

How your bankruptcy will play out depends on the type of bankruptcy you file. With Chapter 7 bankruptcy, for example, a trustee is typically appointed to take over your property and assess it for resale. Property of value you own can and will be sold in order to raise money for your creditors. With that being said, you may be able to keep important personal items and potentially even real estate since the rules regarding your Chapter 7 bankruptcy vary depending on where you live.

By contrast, you usually keep your property when you file for Chapter 13 bankruptcy. However, you need to earn a regular income and agree to repay most of your debts on a repayment plan approved by the courts. A trustee will work with you to collect payments, which they’ll use to repay your creditors according to the plan. While bankruptcy can be a relief for consumers who are able to discharge some of their debts, not all debts can be discharged. Most tax debts cannot be discharged in bankruptcy. You also typically cannot discharge child support payments, alimony, most types of student loans, court fines, criminal restitution and amounts owed due to personal injury caused by driving under the influence.

Why Someone Would File For Bankruptcy

Filing for bankruptcy is usually seen as a last resort; mostly due to the lasting impact filing can have on your finances. A recent bankruptcy can easily cause your credit score to plummet, which will likely make it difficult to purchase a home, buy a car or qualify for other types of loans. Filing for bankruptcy can also cause your insurance rates to go up. However, consumers who file for bankruptcy usually do so because they are unable to navigate their way out of a financial crisis on their own. While bankruptcy is a permanent and drastic move that has many downsides, the process is intended to get people on a sustainable path toward better finances. Because debts can be entirely discharged throughout the process, filing for bankruptcy can be seen as a godsend for those who are truly struggling and have few other options, if any, to consider.

If you are overwhelmed by your financial situation and things only seem to get worse with each passing month, you may want to consider bankruptcy as a way out. There are plenty of situations where it makes sense to file for bankruptcy despite the consequences.

Here are some reasons to consider filing:
• You have so much debt that it would be impossible to pay it off during your lifetime.
• You’ve experienced an extreme loss in income that makes it impossible to repay debts without any help.
• You have been sued for an extraordinary amount of money you cannot repay.
• Your financial situation is grim, and you need a fresh start.
• Collections agencies and creditors are calling you around the clock and you need third-party help.

Does Bankruptcy Affect My Credit?

Having a bankruptcy on your credit report will have a negative impact on your credit. A bankruptcy will make it harder to get loans or credit in the future, and your rates will be higher. How long a bankruptcy stays on your credit report depends on the type of bankruptcy you file.
Chapter 7 bankruptcy can stay on your credit reports for 10 years, while Chapter 13 bankruptcy only stays on your reports for seven years. However, the impact on your credit score will lessen over time. For example, a bankruptcy filed last year will have a greater impact than a bankruptcy filed five years ago. Bankruptcy is intended as a last resort for people who have debts they cannot pay off through other means. That is one reason the credit penalty is so severe if you can avoid bankruptcy, it is usually in your best interest to do so. Here are a few tips to avoid filing bankruptcy.

The first tip is to try and cut your expenses as much as possible. If you aren’t able to balance your budget so that your income is more than your expenses, you may find that bankruptcy does not give you the clean start you’re looking for. You can also try to negotiate with your creditors to see if they will accept an alternative payment plan. Depending on the types and amounts of your debts, you might also consider debt consolidation. You might be able to consolidate your debts by applying for a personal loan and using the proceeds to pay off your other debts. You can also work with a company that specializes in debt consolidation. If you work with a company, find one that has positive reviews and does not charge an excessive amount of fees.

What Bankruptcy Can Do

Bankruptcy allows people struggling with debt to wipe out certain obligations and get a fresh start. The two primary bankruptcy types filed—Chapter 7 and Chapter 13 bankruptcy—each offer different benefits and, in some cases, treat debt and property differently, too. You’ll choose the chapter that’s right for you depending on your income, property, and goals.

Stop Creditor Harassment and Collection Activities

Once you file, the court puts in place an order called the automatic stay. The stay stops most creditor calls, wage garnishments, and lawsuits, but not all. For instance, creditors can still collect support payments, and criminal cases will continue to proceed forward.

Stop a Foreclosure, Repossession, or Eviction (at Least Temporarily)

The automatic stay will stop these actions as long as they’re still pending. Once complete, bankruptcy won’t help.
• Evictions: An eviction that’s still in the litigation process will come to a halt after a bankruptcy filing. But the stay will likely be temporary. Keep in mind that if your landlord already has an eviction judgment against you, bankruptcy won’t help in the majority of states. Learn more about evictions and the automatic stay.
• Foreclosure and repossession: Although the automatic stay will stop a foreclosure or repossession, filing for Chapter 7 won’t help you keep the property. If you can’t bring the account current, you’ll lose the house or car once the stay lifts. By contrast, Chapter 13 has a mechanism that will allow you to catch up on past payments so you can keep the asset. Find out more about bankruptcy’s automatic stay and foreclosure and car repossession and bankruptcy.

Wipe Out Credit Card Debt and Most Other Non-priority Unsecured Debts

Bankruptcy is very good at wiping out unsecured credit card debt, medical bills, overdue utility payments, personal loans, gym contracts. In fact, it can wipe out most non-priority unsecured debts other than school loans. The debt is unsecured if you didn’t promise to give back the purchased property if you didn’t pay the bill. By contrast, if you have a secured credit card, you’ll have to give the purchased item back. Jewelry, electronics, computers, furniture, and large appliances are often secured debts. You can find out by reading the receipt or credit contract.

Wipe Out Secured Debt (But You’ll Have to Give Up the Purchased Property)

If you can’t afford a payment that you secured with collateral such as a mortgage or car loan you can wipe out the debt in bankruptcy. But you won’t be able to keep the house, car, computer, or other item securing payment of the loan. When you voluntarily agree to secure debt with property, you must pay what you owe or give the property back.

What Only Chapter 13 Bankruptcy Can Do

Chapter 7 and 13 each offer unique solutions to debt problems. The two bankruptcy types work very differently. For instance, how quickly your debt will get wiped out will depend on the chapter you file:
• Chapter 7 bankruptcy. This chapter takes an average of three to four months to complete. Learn more about erasing your debt in Chapter 7 bankruptcy.
• Chapter 13 bankruptcy. If you file for Chapter 13 rather than Chapter 7, you’ll likely have to pay back some portion of your unsecured debts through a three- to five-year repayment plan. However, any unsecured debt balance that remains after completing your repayment plan will be discharged. Find out how to pay off or discharge your debts in Chapter 13 bankruptcy.
• Chapter 7 is primarily for low-income filers, and therefore, it won’t help you keep property if you’re behind on payments. But, if you have enough income to pay at least something to creditors, then you’ll be able to take advantage of the additional benefits offered by Chapter 13.
Here Are Some Of The Things That Chapter 13 Can Do.
• Stop a mortgage foreclosure: Filing for Chapter 13 bankruptcy will stop a foreclosure and force the lender to accept a plan that will allow you to make up the missed payments over time. To make this plan work, you must demonstrate that you have enough income to pay back payments and remain current on future payments. Allow you to keep property that isn’t protected by a bankruptcy exemption. No one gives up everything own in bankruptcy. You can save (exempt) items you’ll need to work and live using bankruptcy exemptions. A Chapter 7 debtor gives up nonexempt property—the trustee liquidates unprotected property for creditors but not a Chapter 13 filer. While it might seem as though you’d get to keep more assets, it’s not the case. Chapter 13 filers pay the value of any nonexempt property to creditors through the repayment plan.

What Bankruptcy Can’t Do

• Prevent a secured creditor from foreclosing or repossessing property you can’t afford. A bankruptcy discharge eliminates debts, but it doesn’t eliminate liens. A lien allows the lender to take property, sell it at auction, and apply the proceeds to a loan balance. The lien stays on the property until the debt gets paid. If you have a secured debt—a debt where the creditor has a lien on your property; bankruptcy can eliminate your obligation to pay the debt. However, it won’t take the lien off the property—the creditor can still recover the collateral. For example, if you file for Chapter 7, you can wipe out a home mortgage. But the lender’s lien will remain on the home. As long as the mortgage remains unpaid, the lender can exercise its lien rights to foreclose on the house once the automatic stay lifts.
• Eliminate child support and alimony obligations. Child support and alimony obligations survive bankruptcy, so you’ll continue to owe these debts in full, just as if you had never filed for bankruptcy. And if you use Chapter 13, you’ll have to pay these debts in full through your plan.
• Eliminate student loans, except in limited circumstances. Student loans can be discharged in bankruptcy only if you can show that repaying the loan would cause you “undue hardship,” which is a very tough standard to meet. You must prove that you can’t afford to pay your loans currently and that there’s very little likelihood you can do so in the future. Find out more about the undue hardship standard and student loan debt in bankruptcy.
• Eliminate most tax debts. Eliminating tax debt in bankruptcy isn’t easy, but it’s sometimes possible for older unpaid tax debts. Learn what’s needed to eliminate tax debts in bankruptcy.
Eliminate other non-dischargeable debts. The following debts aren’t dischargeable under either chapter:
• debts you forget to list in your bankruptcy papers (unless the creditor learns of your bankruptcy case)
• debts for personal injury or death due to intoxicated driving, and
• fines and penalties imposed as a punishment, such as traffic tickets and criminal restitution.

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