Bankruptcy is a judicial process that allows a debtor to discharge their debts. For individual debtors there are two types of bankruptcies that you can file. The first type is a chapter 7 bankruptcy. Under this chapter you can discharge your debts in many cases with out making payments to your creditors if you have little to no assets and minimal income. The second type of bankruptcy filing is a chapter 13. Under this chapter, you will enter into a payment plan where you will send payments to a trustee who will then pay your creditors. The payment plan generally lasts anywhere from three to five years. This is a good option for individuals who want to keep their assets but haven’t been able to keep up with the payments that currently have.
There are some pros and cons to filing, therefore, you should weigh your decision to file. Some cons to filing bankruptcy are that a bankruptcy filing will stay on your credit report for 7 years after the discharge. Additionally, lending institutions will generally not lend to you for a period of time and you will have to slowly rebuild your credit. Also, there are some debts that are very difficult to discharge such as student loans. Furthermore, tax debts and child support in many cases are not dischargeable. However, there are some pros to filing bankruptcy. Once you file a bankruptcy case, you automatically get relief from any further collection activity from your creditors. Therefore, your car lender would have to stop any further repossession activity on your vehicle and you may be able to stop a foreclosure sale on your home. Another pro is that once you have discharged your debts you no longer owe those creditors and you are free from debt.
Bankruptcy is a very complex process that involves filing complicated paperwork and attending court proceeding and hearings. Filing the wrong paperwork or even filling out the paperwork incorrectly could negatively impact your case and may result in a dismissal. An experienced Bankruptcy Lawyer Prince Georges County MD may be able to assist you in filing your paperwork, represent you in court proceedings, and help you determine under which chapter of the bankruptcy code you should file your case.