How to Determine Whether a Person Should File for Bankruptcy
The general rule of thumb is anyone can qualify for a bankruptcy, but is it in a person’s best interest to file?
The answer is not simple.
There are three major types of bankruptcies that people may use to discharge debts or work as a payment plan. Chapter 7, Chapter 13, and Chapter 11. Most people qualify for a Chapter 7 bankruptcy, however even if a person qualifies for a Chapter 7, a Chapter 13 may be the best option based on the goals of a client. For basic credit cards, federal taxes, personal injury claims, medical bills, generally a Chapter 7 is the best choice. For people with underwater mortgages or those currently behind on mortgage payments, a Chapter 13 may be a viable option as a person will receive a discharge on most debts, will not be require to pay most unsecured creditors (i.e. Credit cards) and can force a lender to accept back payment over extended periods of time (i.e. stop foreclosures and extend payments over time).
Alternatives to bankruptcy are Short Sales, Loan Modifications, Mediations and settlements. For additional information please contact Integrity Law Group, PLLC for a free consultation.