Filing for Bankruptcy in a Financial Crisis

Jul 2 10:52 2011 Alfred Ardis Print This Article

In most cases of bankruptcy, your assets are liquidated, meaning everything you own of value is sold off to pay debts. There are also ways to reorganize your debt to make it more affordable. Talk to a lawyer to learn more.

If you think you know what bankruptcy is,Guest Posting you may be thrown when you actually look into it as a viable way to help you in a financial crisis. When people think of bankruptcy they think of people who can't pay their debts who file and then, magically, all of their financial burdens are gone. They don't have to repay the creditors. The only downside is that they have little to no credit for a period of seven years. 

Filing is much more complex than simply filling out paperwork and getting out of paying what you owe. The most important thing to learn is that you'll probably need a lawyer. This is because you are filing with the federal courts, who have exclusive jurisdiction over this kind of case. Having a lawyer who is thoroughly knowledgeable in this kind of law will be invaluable to you when you decide to explore filing. Cases can be filed under three main categories: Chapter 7, Chapter 11, and Chapter 13. 

Chapter 7 concerns the liquidation of you assets. When you work with a lawyer, they can help take an inventory of your assets in order to determine how they measure up to what you owe your debtors. In some cases you'll find that my selling your home or other valuable asset, you may not need to declare bankruptcy. You can still have enough to continue to live without. In other cases, however, the value of what you own will pay off a significant portion of what you owe or most of what you owe.

When you file for Chapter 11, your finances and debts are reorganized. This may mean your interest rates will go down or your payment plans will be lengthened so that you have less to pay every month. Your interest rates will be fixed so that they will not rise to a point higher than you can pay. This is most commonly used when a company or business files for bankruptcy. This way, a business can continue to employ and sell product without having to liquidate their assets and call it quits. Whether you are a small business or a massive corporation, this is sometimes the best option. However, individuals can also take advantage of this type of filing.

Chapter 13 is a unique offering because it gives you a chance to hold on to some of your most valuable assets, differing from Chapter 7 in this way. The most significant asset you can save by filing under chapter 13 is it give you an opportunity to save your home from foreclosure and can help you with delinquent mortgage payments. Once you've successfully reorganized under this filing, much of what you owe in past payments will be forgiven and you will be back on track to paying off your mortgage with regular payments. Given that many people have been affected by sliding mortgage rates where they sign contracts that can adjust rates dramatically, this is a great option for people who feel they have been caught financially.

If you're in a financial bind, see if a lawyer can help discuss all of these options with you.

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Alfred Ardis
Alfred Ardis

If you're looking for a lawyer in Manassas bankruptcy law services can be found locally. To find the law office of one practice that specializes in this area, please visit http://www.msandlerlaw.com/

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