FAQs

Many people find themselves in this situation – it’s time to pay the bills, but the income just won’t stretch that far.  Thankfully, you do have options.  The most common forms of debt relief are (1) consolidation loans (2) credit counseling (3) debt settlement negotiations and (4) bankruptcy.  There are pros and cons to each of these options, and they may negatively affect your credit.  But then, so will not paying your bills.  The best thing for you to do now is to gather your pay stubs and proof of all sources of income, along with all of your bills and talk to an attorney licensed to practice in your state.  They can review your financial situation and discuss what options are available to you based on this personal assessment.

An attorney knowledgeable in the area of debt relief can be an invaluable asset to you.  Most importantly though, not only do attorneys have a reputation to uphold, but they are also bound by the ethical standards of their state bar.  This means, when you deal with a licensed attorney, you are far less likely to become the victim of fraud.  I’m sure you’ve heard horror stories about people who have given their last dollars to an unscrupulous “Credit Fixer” only to find that they put them in a worse situation.  By talking to an attorney about your debt relief options, you have a greater chance of getting accurate, unbiased information.  It’s easy to check on the status of an attorney.  Just search the internet for your state bar association website.  They usually have a spot on the first page for you to do a name search.  If the person you are working with is not appearing on the state bar website – be vary wary!

Once you file your Chapter 7 bankruptcy, an automatic stay goes into effect and creditors must cease collection activities.  You are entitled to keep certain exempt personal assets, and your remaining assets are used to satisfy your creditors to the extent possible.  Your remaining debts are discharged, or forgiven, when your case closes and you receive a fresh start to begin rebuilding your financial life.

Under Chapter 13, you work with your attorney and financial advisor to develop a 3-5 year repayment plan that your creditors will approve.  As with Chapter 7, an automatic stay occurs at the time that you file.  Remaining unpaid debts are discharged, or forgiven, when you have completed the 3-5 year plan.

• Chapter 13 is only available to individual persons
• Chapter 13 allows you to keep your assets
• Chapter 13 is particularly appropriate if you are employed and thus have regular income