Hiring A Bankruptcy Attorney For Peace Of Mind
Is Bankruptcy The Next Step For You?
Gabriel Freeman
No one looks forward to the day when they realize that their financial situation has gotten out of hand, but for those in this tough spot, the bankruptcy option can be the only way to deal with their situation. From the constant bill-collection calls and letters to the prospect of losing the roof over your head, the contemplation of bankruptcy signals a need for desperate measures. It's important to understand what bankruptcy can do for you and what could keep you from being able to file, so read on to learn more.
Unsecured Debt and Bankruptcy
You will become very familiar with the terms "secured debts" and "unsecured" debts during bankruptcy proceedings. The meaning of this term is paramount to properly evaluating whether or not filing for bankruptcy is right for you.
Secured debt is any money you owe that has collateral to back it up. Collateral is a piece of property; it can be real estate, a car, or stocks and bonds. Often, a loan is tendered with the understanding that certain property will be forfeited in the event of non-payment. For bankruptcy purposes, that means that the forgiveness of a secured debt could mean the loss of the property associated with the debt. For example, if have fallen behind on mortgage payments, your home is in danger of being foreclosed upon. If you file for bankruptcy, you could temporarily halt foreclosure actions, but you could still end up losing the home if you don't catch up on your payments. It's worth mentioning that if you stop making payments on certain debts (unsecured debt, see below), you may have more ready cash available to get caught up on your past due mortgage.
Unsecured debt is any money that you owe that has no collateral associated with it. Credit-card debt and personal or "signature" loans are the most commonly used forms of unsecured debt. If you fail to pay your credit-card debts, no property can be seized. Most people have plenty of credit-card debt, and often it's the overuse of that "free" money that results in burdensome minimum payment requirements that send some to the bankruptcy courts.
The Means Test
If the above information has cheered you somewhat, you should take some to time to understand one major stumbling block to filing bankruptcy: the means test. This test measures your income and compares it to the median income in your particular state. If your income exceeds the state median, you may still be able to file if you meet certain qualifications. Some offsetting factors for those who "fail" the means test include an unusually high mortgage amount, health-care expenses, car payments, child-care expenses, taxes, and more. There are several different categories of expenses that may be used to reduce your income and thus allow you to qualify for filing if your income exceeds the median. Online calculators can be useful in giving you a general idea, but speak with your bankruptcy attorney to ensure that you aren't missing out on the potential financial relief that a bankruptcy could mean for your situation.
Talk to a professional like Clinger Richard S for more information.
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Hello, my name is Kiley, and if you have major debts and you're thinking about filing for bankruptcy, this is the blog you need to read. Two years ago I was very much in debt, and then I was laid off from my job. The only alternative I had was to file bankruptcy. I was very nervous about filing bankruptcy until I spoke with a bankruptcy attorney. The attorney explained the bankruptcy process with me in terms that I could understand. After the consultation, I felt much better. If you're considering filing bankruptcy, this blog explains the process so you'll know what to expect. I wanted to write this blog so that I could help other people who are in the same situation and to let them know how the process works.