When people find themselves in an untenable financial situation, an option that many eventually turn to is filing for bankruptcy. While most financial experts will recommend bankruptcy as the last resort, there are people who find themselves in such financial circumstances where bankruptcy is unavoidable. However, what some people are unaware of is that there are multiple types of bankruptcies.
The Reasons for Speaking with a Bankruptcy Lawyer
When a person is considering filing for bankruptcy, it is highly recommended that they speak with a chapter 7 or chapter 13 bankruptcy lawyer in Jonesboro. There are many reasons to speak with a bankruptcy attorney, and one is understanding what type of bankruptcy an individual qualifies for. Another is so that someone filing for bankruptcy knows their obligations.
Credit Counseling
Federal laws were implemented several years ago to limit the amount of people filing for bankruptcy. In addition to a means test, the government requires individuals in this situation to go through credit counseling in order to avoid a similar future problem.
The Administering of a Means Test
After the initial consultation with a bankruptcy lawyer, the lawyer will administer what is known as a means test. This is basically to identify an individual or couple’s income levels. This is important because lower income levels mean an individual or couple qualifies for chapter 7. However, for higher income earners, they have the option for bankruptcy through a chapter 13 filing.
What Does Chapter 13 Do
Chapter 13, for all its complicated processes, is a repayment plan ordered by the court. This repayment plan may represent the exact amount of money a person owes to creditors, or it may represent a lowered amount through bankruptcy negotiations. In any case, an individual will have anywhere from 3 to 5 years to repay the agreed-upon amounts.
As you can see, speaking with a chapter 13 bankruptcy lawyer like Chris Carouthers & Associates, LLC in Jonesboro makes a great deal since. That’s why if you are in a financial situation that you can’t see your way out of, you may want to consider consulting with a bankruptcy attorney to see what your options are. If you would like to learn more about what a bankruptcy attorney can do for you.
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