Living from one paycheck to another is difficult but is a reality for many individuals. The inability to pay the bills could be from divorce, illness, death, loss of a job, and much more. A stressful situation can be magnified when there’s not enough money to pay the bills.
Whether a person has a regular source of income or doesn’t, there are bankruptcy options to eliminate the debt they have. A person can schedule a consultation with a Bankruptcy Lawyer In Tacoma Wa to determine which type of bankruptcy is right for them. The number of assets and the percentage of unsecured debt will help the attorney determine which type of bankruptcy to file.
Will All Of The Debt Vanish?
Bankruptcy eliminates a large amount, if not all, the debt an individual has. There are exceptions to this rule, including child support, alimony, student loans, and certain taxes. If an individual had fraudulent charges on a credit card, they may not be permitted to include these in the bankruptcy.
Reaffirming Debt
One way to retain assets that are not exempt from the bankruptcy is by reaffirming the debt. An individual must be current on the payments when the bankruptcy is filed and must continue to make the payments. Another consideration an individual should think about is that, once the bankruptcy is discharged, they will not be able to file again for another eight years.
Chapter 7
Individuals who have a lot of credit card debt and a limited amount of income should consider this type of bankruptcy. This is a total liquidation of any assets an individual might have that are not exempt from the bankruptcy. A trustee will be assigned to sell the unprotected assets, and the creditors will be paid from the proceeds.
Chapter 13
A trustee is not appointed to sell the assets of an individual who files for Chapter 13. Chapter 13 restructures the debt an individual currently has. The bankruptcy court will determine a repayment plan of three to five years. A Bankruptcy Lawyer In Tacoma Wa will help a person determine if this type of legal proceeding is the best option for their situation.
