If you are overwhelmed with debt, you may benefit from the help of a bankruptcy lawyer Berkshire County. During a bankruptcy, you can discharge or restructure certain debts, including credit card debts, mortgages, and car loans. However, it is important to understand how bankruptcy works before you file. A bankruptcy lawyer in Pittsfield MA can inform you of your options and advise you as to which types of bankruptcy best suits your situation.
In the United States, there are two forms of personal bankruptcy: Chapter 7 and Chapter 13. Depending on your financial assets and goals, your bankruptcy lawyer in Pittsfield MA will recommend one of these processes.
Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, you can discharge or eliminate most debts. (Certain debts, like student loans, most tax obligations, and child support and alimony cannot be discharged.) However, there are disadvantages and limits to Chapter 7 filings. First, you must prove that you are financially unable to pay your debts. Then, most of your property will be sold to pay off your creditors.
While there are exemptions to this liquidation of your personal property (for example, you will retain your right to public benefits and your pension), the bankruptcy trustee will take most of your personal property. A Chapter 7 bankruptcy typically takes three to four months to complete.
Chapter 13 Bankruptcy
In a Chapter 13 bankruptcy, you can keep your house, motor vehicles, and other personal property. Instead of liquidating your assets, your debt is reorganized and a payment plan is created. However, Chapter 13 releases less debt than Chapter 7 and you must show that you are capable of repaying your obligations to qualify.
While your assets are not liquidated, you must pay your creditors the value of your non-exempt assets over a period of time (typically three to five years). You will make monthly payments to the bankruptcy trustee during this time period.
If you are in foreclosure or have significant unpaid taxes, a Chapter 13 bankruptcy may be in your best interest. A bankruptcy lawyer in Pittsfield MA can help you evaluate your financial situation and help you understand your options.
How to Choose Between Chapter 7 and Chapter 13 Bankruptcy
There are definite pros and cons to Chapter 7 and Chapter 13 bankruptcies. Before you file, it is important to understand how each process would impact your debt and financial future. Again, not everyone qualifies for Chapter 7 bankruptcy. To be eligible, you must meet the Chapter 7 means test. If your monthly disposable income exceeds the means test threshold, you can only file a Chapter 13 bankruptcy.
Chapter 7 is a quicker and less expensive process. But, it is more difficult to keep your home and other personal property after a Chapter 7 bankruptcy. On the other hand, Chapter 13 takes longer and is more expensive. However, during a Chapter 13 bankruptcy, you may be able to participate in a mortgage modification program, which would stop foreclosure on your home. And, you do not have to surrender your nonexempt assets during a Chapter 13 proceeding.
Without the help of a seasoned bankruptcy lawyer Berkshire County, it can be hard to decide which form of bankruptcy is best for you. An attorney can fully assess your situation and craft a bankruptcy strategy that meets your current needs and future goals. Moreover, the guidance of a lawyer can give you peace of mind during an incredibly stressful time.
Bankruptcy Lawyer in Pittsfield MA Can Help
Before you file for bankruptcy, seriously consider speaking with a bankruptcy lawyer Berkshire County. It can be difficult to understand your options when you are overwhelmed with debt and financial pressures. The Law Office of Eric Kornblum can help you discharge or restructure your debt on the road to financial recovery.