Types of Bankruptcy

As we move further into the twenty first century, many Americans aren’t sure of what to expect.  Many businesses have begun to outsource labor to Mexico and India.  And with these loss of jobs comes unemployment to the employees.  These same people who are caught up in a company’s decision to search for lower waged employees cannot find suitable jobs in the same geographic area in which they lived and grown up. 

Many have worked in the same job for many years and earned higher wages.  Now finding new work with the higher wage is almost impossible.  This can start to be a financial impact on the family and as well as bill collector’s.  Their calls only add to the already stressed out situation.  Now there is an option that people start considering when placed in this situation and that is to file for one of the types of bankruptcy.  For the homeowner there are two different types of bankruptcy; Chapter 7 or Chapter 13.

Chapter seven bankruptcies will allow the debtor to erase all debts owed while letting people keep the house and cars if they desire.  This can really take the burden of debt payments away which in turn takes away much of the stress that the people were under.  The only payments that the people will have to pay are the payments on the house and any cars that the people may have kept.

Types of Bankruptcy Chapter Thirteen

As the first part of this article dealt with chapter seven bankruptcies, this section includes the other types of bankruptcy such as chapter thirteen bankruptcies.  Using Chapter 13 means a person can probably keep most things but there is still a payback balance.

The difference in this case is that people who file chapter thirteen bankruptcies tell their attorney what they want to keep and in turn, the attorney begins the task of talking to the creditors.  Depending on the situation, this can take thirty days or even more.  The people’s attorney will try to get the creditors to accept lower overall costs for each item.  An example of this would be about the cost of a piano. 

Many time the balance that is owed to a creditor can be reduced but only negotiation can determine this.  This means that what ever is left in terms of a balance will be owed by the debtor.  There are many times that an attorney can reduce this ammount significantly but it still comes down to the company and the actual balances.

The monthly payment may drop as a result which saves people money every month.  Of course the best advice is to consult with a lawyer due to the complexity of the legal system and they can best determine which type of bankruptcy would best address your situation.

You may want to check out How to File Bankruptcy.

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