Credit Counseling, Chapter 13, Or Chapter 7: Which Is The Best Choice For You?
When a family’s economic conditions are bad, many people have questions about how to deal with their financial problems. Which solution is simplest? Which will cause the least long-term financial damage? Which will be the least expensive in the long run? How can you get the answers to these dilemmas? In Wisconsin, a Milwaukee bankruptcy attorney has the answers you need. A competent Milwaukee bankruptcy lawyer can lead you through the process to your best solution. As an extra added bonus, you will come out the other side equipped with the knowledge needed to handle your future finances with skill. What are your choices when you decide to seek help with your financial problems? A good bankruptcy lawyer can present you with the viable options and help you to select the one that will work best for you. Three options are debt settlement, Chapter 7, and Chapter 13.
Debt settlement is the easiest, least drastic solution. When you choose debt settlement, your attorney can work with you and your creditors to work out a plan for your entire debt total to be paid off. Your creditors would prefer payment to bankruptcy. This fact provides the lawyer with some leverage on your behalf. As the lawyer works with the creditors to build a plan, he or she can present the prepared schedules for bankruptcy as a way of working out the most advantageous plan for you. On some occasions, a large payment may be required. If this is a viable possibility for you, the lawyer can work out the details with you.
If debt settlement cannot work for you, the next decision is which type of bankruptcy is best for you. In certain times and in many situations, Chapter 13 is the option for you. The initial prerequisites are a small fee and some classes. The first class is the same one that is provided to people pursuing debt settlement. After the first class comes the 341 creditor meeting. During this session, the meeting normally consists of the attorney, the debtor, and the bankruptcy trustee. (Creditors do not always attend.) During this meeting, the bankruptcy plans are enumerated so that everyone has all the facts. These facts include the reason for the bankruptcy filing and the list of all monies owed. Third is a financial management course. The value of these meetings should be obvious if your goal is to get a new start and handle your money responsibly in the future. The goal of Chapter 13 is that you will repay an agreed-upon portion of all debts.
If the financial problems is extreme then filing for Chapter 13 may not be the best choice for you. In such cases, Chapter 7 will be the answer. For this option, the same meetings and classes are also required. The main characteristic of Chapter 7 is that the debts are not paid back—they are eliminated. Under this plan, you are allowed to retain assets such as your home, car and personal property as long as their value does not exceed the bankruptcy exemptions that you are allowed to take. Conversely, you are not able to escape certain debts, some of which include taxes owed to the IRS or state, student loans, alimony, and maintenance or support payments.
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