Bankruptcy is not for everyone. However, for some people, it can be a great option for starting over financially and managing out-of-control debt. If you are facing a mountain of debt, bankruptcy attorneys are available to help you determine whether this option is right for you financially.

What Is Bankruptcy?

Bankruptcy was designed to help people achieve a fresh start when they are overwhelmed by unmanageable debt. Through a legal process, you may be able to relieve part or even all of what you owe to lenders and creditors. If you cannot meet your obligations to pay, bankruptcy can be your best option for receiving help and starting over.

Many businesses file for bankruptcy, but it can happen to individuals as well. There are two major kinds of bankruptcy that apply to individuals: Chapter 7 bankruptcy, in which all or some of the debt is discharged completely; and Chapter 13 bankruptcy, in which a payment plan is created to help the debtor repay all or some of their debt.

Chapter 7 bankruptcy is known as liquidation because it requires that some of your debt is repaid through relinquishing liquid assets — possessions that can be converted into cash, such as vehicles, real estate, and savings or checking account balances. Some people file for Chapter 13 bankruptcy even though they qualify for Chapter 7, so they can keep their liquid assets.

Can Bankruptcy Help Me?

There is a negative stigma to bankruptcy, as it does stay on your credit report for several years and impacts your ability to be approved for future loans or credit cards. However, bankruptcy can really help certain people. Whether filing for bankruptcy puts you on a manageable payment plan or helps you completely discharge your debt, there are a variety of ways that bankruptcy can actually improve your quality of life. It can: help you eliminate debt such as credit cards; halt repossession or foreclosure so that you can keep your house or other liquid assets; stop wage garnishments; and stop your utilities from being shut off or other debt collection actions that may impact your quality of living.

More than anything, bankruptcy provides an opportunity for a fresh start. Additionally, bankruptcy helps your overall financial management because you undergo credit counseling as part of the process. You will learn how to manage debt in the future better.

How Can I Find Bankruptcy Help?

Bankruptcy laws can be challenging to navigate. It is a good idea to get advice from a bankruptcy attorney, so you can make an informed decision about filing for bankruptcy and can file accurately for the type that is right for you. If you are in the Chicago, IL area and have questions about bankruptcy help, contact Schottler Law to schedule your free 30-minute consultation today.