Many people these days find themselves in serious financial trouble and things have gotten so bad that they feel that they don’t know what to do anymore. Being in that situation has to be extremely scary as your creditors are not likely going to be understanding when you cannot pay them even the minimum amount due.
It gets even worse for you if you own your home and you are not able to afford your mortgage and the bank is threatening to take away your home. There is are not really whole on of things for you to do if you have gotten to the point where you can longer afford make all of your payments. One of the last resorts is a legal proceeding called bankruptcy.
What is bankruptcy
A bankruptcy is a legal proceeding in which you face a judge and you tell them that you no longer have the means to continue to pay your debts. The judge will appoint a trustee and they will evaluate your debts and your income in order to determine if they think your debts should be discharged. Fortunately, if you own your home, a foreclosure can be stopped, and you will not lose your home. However, there are certain debts that are not covered by bankruptcy and you will still responsible for paying them once your bankruptcy has been discharged.
Here are a few examples of debts that cannot be discharged by a bankruptcy;
- Student Loans
- Tax debts, fines or penalties from the government
- Court-ordered child support payments
- Court ordered alimony payments
Filing Bankruptcy will temporarily stop the harassing phone calls from creditors wanting their money, but once you have filed bankruptcy, they must immediately cease all forms of contact until after your bankruptcy has been finally decided by the judge. All decisions by the courts are final and when they discharge your case you will ready to start over.
However, you might really want to be sure that you think it completely through because you will have poor credit for many, many years once it hits your credit report. Once it is where it normally stays for at least 7 years and it will likely keep you from getting any new credit.
There are things that you can consider before taking the bankruptcy route that will not put your credit at risk and that includes finding a lender to request a debt consolidation loan. This will make it possible for you to pay off the debts and stave off foreclosure and bankruptcy.
Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.