So you have filed for bankruptcy. You have reaped the benefits of your decision. You are no longer in bankruptcy and you are finally able to start fresh. What happens now? Is it possible to “bounce back” or “repair your finances?” For how long will your credit score be affected? These are important questions that need to be answered if you want to successfully move on to a better and more secure debt-free way of life. Fortunately, the answers are not difficult to ascertain.
Did You File a Chapter 7?
Very soon after making the decision to file for bankruptcy, you must decide which type of bankruptcy you would like to file. In some cases, this may seem like a no-brainer; people with no income or those in massive debt should file a Chapter 7. For those who are in less dire situations, however, it is much less clear-cut. Fortunately, with some important information and discussion with your affordable bankruptcy attorney in Salt Lake, you can make an informed decision that will ultimately benefit you.
What Is the Difference?
You may have recently heard the term “in bankruptcy.” The way it’s used implies that bankruptcy is not just an action, but rather a condition or state of living. What does this mean? More importantly, what does this mean for you? The term itself refers to the amount of time your bankruptcy is an open case and you are protected by the stay, and this is not always a constant thing. It can differ from bankruptcy to bankruptcy and type to type. It is a good idea to find out how long you will be “in bankruptcy” so that you can make plans for life after bankruptcy.
Utah Chapter 7
One of the most crushing and difficult debts one can accrue is student loan debt. It builds up quickly and can -- and usually does -- persist well into old age. You may already be aware that as a general rule, student loan debts cannot be discharged in either a Chapter 7 or a Chapter 13 bankruptcy, and although this is not always the case, how can one tell whether or not one’s student loan debt can be discharged? More importantly, how does student loan debt work with the automatic stay granted to filers of bankruptcy?
You may hear the term ‘disposable income’ thrown around by your Draper bankruptcy attorney during the course of your preparation and filing for bankruptcy. It is potentially confusing; if you had disposable income, why would you file for bankruptcy in the first place? However, disposable income is not simply extra money, and even with a small amount of it, you may need to continue with your bankruptcy.
The threat of foreclosure can be devastating. What happens now? What will we do if we lose our home? Where else can we live? What can we do to save our home? These questions may seem daunting at first, but if your financial situation is dire, bankruptcy may be your best and most effective option. It may seem like a difficult or dangerous choice at first glance, but if you file a Chapter 13, you can actually save your home and rectify your financial troubles in one fell swoop.
The Utah Foreclosure Process
Every person or couple who files for bankruptcy must go through a legal process. Once you begin this process, it will help determine the magnitude of your debt problem, whether or not you should file, and what kind of bankruptcy would benefit you most. Additionally, this process helps protect you from aggressive creditors and misunderstandings. It can be a bit detailed, but if you need to file for bankruptcy in Utah, you need to know a few things about the process.
Step One: Attend Utah Bankruptcy Counseling
When most people think of bankruptcy, they think of a Chapter 7. This is the type of bankruptcy that, using liquidation of assets, effectively cancels most debt. Though things like student loans and debts to the IRS are not wiped away, Chapter 7 bankruptcy is the quickest and most complete erasure of debt available. However, not everyone qualifies for this type of bankruptcy. In order to make an informed decision, you must know some key pieces of information; this will help you take the Means Test, which will let you know definitively what your financial situation is.
As you may already know, an individual -- or a jointly filing couple -- has access to two different types of bankruptcy. These bankruptcy types, called ‘chapters,’ are wildly different in execution. While the general goal of both types of bankruptcy is to get on top of crippling debt, Chapter 13 bankruptcy is the most sensible option for homeowners with steady income but too much debt. Whether your debt is from a business venture gone wrong, a long period of unemployment, or anything else, filing a Chapter 13 can help you throw off your debt for a new start.
One of the most common concerns expressed by potential clients is whether or not a Chapter 7 will ruin one’s credit. While the answer is no, it will not ruin one’s credit, it does have an effect. Your decision to file a 7 may depend on whether or not the effects are more beneficial than detrimental, but remember: after Chapter 7 bankruptcy, financial problems are much easier to solve.
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