Foreclosure Lawyer
When debt starts to outpace your income – or a major life event, such as divorce, seriously affects your finances – you might consider filing for bankruptcy as a way to wipe out your debt. While almost anyone can declare bankruptcy, taking the time to understand its process may help you move forward with confidence or select a debt management alternative that is more appropriate for your situation. As an experienced New Haven, CT foreclosure lawyer – including those who practice at The Law Offices of Neil Crane – can confirm, those struggling with heavy debt loads (including mortgages) should research their options carefully before committing to any single plan of action.
Qualifying for Chapter 7
Chapter 7 bankruptcy is an opportunity available to low-income earners. If successful, this process can wipe out most unsecured debts, including:
- Credit card balances
- Medical debt
- Outstanding personal loans
However, not all types of debt are cleared with Chapter 7 bankruptcy. Secured debt – mortgages, auto loans, etc. won’t be eliminated in a Chapter 7 case except under very specific circumstances. Spousal support, child support, federal student loans, and most tax debt are also ineligible for discharge under Chapter 7. However, eliminating eligible debts can free up one’s income to pay down remaining obligations.
Qualifying for Chapter 13
Chapter 13 bankruptcy will allow you to reorganize your debt and halt letters and phone calls from your creditors. Once you qualify, you can make manageable monthly payments and begin to rebuild your credit by making these payments faithfully. To qualify for Chapter 13, your income must be sufficient to make the payments and meet the debt limits for both secured and unsecured debt. These amounts tend to change every few years, so you may want to ask an attorney about the current qualifying amounts.
Filing for any kind of bankruptcy is never an easy decision, but you do not have to endure the process alone. Contact an attorney today for further advice and assistance. If filing for bankruptcy isn’t the best option for your situation, schedule a free credit counseling appointment at an accredited, nonprofit credit counseling agency in your area to learn more about debt management alternatives.