Do you live in Joplin and find yourself in a situation where bankruptcy may be necessary? Bankruptcy is not a decision to be taken lightly because it can affect your credit score for up to 10 years.
In today’s blog from Checkett, Pauly, Bay & Morgan, we will discuss the types of bankruptcy and what you can do.
Who Files for Bankruptcy?
Of all bankruptcy cases, 97% are filed by individuals and not companies. Over two million people file every year. Bankruptcy happens for many reasons, such as a significant illness, a personal tragedy, or the loss of a job. A small portion of bankruptcies are the result of frivolous spending and high credit card debt.
Why Would You Need to File for Bankruptcy?
You may not be sure whether you need to file for bankruptcy in Joplin. Here are some guidelines to help. Every person must undergo the means test to determine whether bankruptcy is even an option.
Medical Bills
Did you know that over 60 percent of all bankruptcies occur because of medical bills? Whether the result of a sudden medical emergency or a chronic condition over months or years, medical bills can be financially devastating to those with and without insurance. If you live in the Joplin, Missouri, area and finding medical bills are destroying your financial life, contact us today.
Creditors Seizing Your Property
If you defaulted on a car loan and creditors repossessed the vehicle, you might consider some form of bankruptcy. This applies to a foreclosure on a home or property as well. While your credit is already damaged, filing for bankruptcy can protect you from having other assets seized while you work with your attorney to either discharge the debts or build a repayment or restructuring plan.
Divorce
If you were having financial problems while you were married and filing for divorce, you might need to declare bankruptcy to wipe out the debt incurred while married. This is often the best option to gain control over your finances and make a fresh start.
What Kind of Bankruptcy Should I File?
There are two basic kinds of bankruptcy: Chapter 7 and Chapter 13.
Chapter 7 discharges most kinds of debt, and it’s designed for people whose bills have become so high their income cannot pay them. Chapter 7 wipes the slate clean and gives you a fresh start with your finances. Checkett, Pauly, Bay & Morgan will consult with you as to your options.
Chapter 13 bankruptcy has specific guidelines on how much debt you can carry. This is commonly called the wage earner’s bankruptcy because you must meet two criteria: steady income and unsecured debts. Debts can include credit cards, personal loans, and medical bills that, when combined, are less than $394,725 and secured debts like home and car loans of less than $1.1 million.
If you are behind on government student loans, child support or alimony, or owe federal taxes, these cannot be discharged through bankruptcy.
Chapter 7 Bankruptcy Attorneys at Checkett, Pauly, Bay & Morgan
If you live in the Joplin, Missouri, area and have trouble paying your bills or are experiencing any of the issues discussed in this blog, contact our law firm today or call (417) 358-4049.