A combination of a job loss and medical issues has left the individual in the worst financial condition possible. While there have been attempts to work out payment arrangements with the creditors, some of them are being less than cooperative. At this point, it is a good idea to consult with a chapter 7 bankruptcy attorney in Wetumpka, AL and see if filing for bankruptcy protection is the most prudent move. Here are some questions to ask during that consultation.
Who Is Eligible for This Type of Bankruptcy?
Current bankruptcy laws are designed to protect the interests of all parties involved, including the creditors as well as the debtor. As the Chapter 7 Bankruptcy Attorney In Wetumpka, AL will explain, the client will have to meet certain criteria in order to be eligible for protection. Factors such as the amount and type of debt involved, the income level of the client, and the availability of any assets that can be sold to settle a portion of the debt will be taken into consideration.
Rest assured the attorney knows exactly how to evaluate the circumstances of the client and determine if a chapter 7 bankruptcy is the right move. If the client is not eligible for some reason, exploring the possibility of filing a chapter 13 bankruptcy can be discussed.
Does the Debt Really Go Away?
Some people think that a chapter 7 bankruptcy discharges all the debt immediately, but in fact, the process will take a few months. A trustee is appointed by the court to verify the information provided by the client, which includes confirmation of any assets held by the client. Any of those assets that are not considered exempt will be sold by the trustee. The proceeds from the sale are distributed to the creditors. Any remaining debt is discharged and no longer owed by the debtor.
What Impact Will Bankruptcy Have on Credit Ratings?
Most people who seek bankruptcy protection already have damaged credit ratings. Filing for a chapter 7 is not likely to make things much worse. While there may be a dip in the credit score, things should begin turning around in a few months.
For anyone who thinks bankruptcy may be the only solution, talk with the team at Visit Courtney & Mann LLP today. After assessing the situation, the lawyer can provide the client with advice that will lead to a better financial outlook.
