Filing for bankruptcy can be one of the most difficult decisions you can make. The act of filing can have an impact on the rest of your life, for better or for worse, and many people find it hard to admit that they can’t quite handle their debts by themselves. However, filing can actually be the best financial decision you make. If you are considering bankruptcy, it’s likely that you already need to file and have needed to for a while now. Although it may not seem very appealing to you, it is in your best interests to contact a bankruptcy attorney in Sterling Heights as soon as you can.
The Purpose of Bankruptcy
There are many misconceptions about bankruptcy, one of which is what bankruptcy actually does. Many people believe it is a free pass or a debt eraser; that is not true. Bankruptcy is a type of law designed to help people managed their debt, either by minimizing and consolidating it or by releasing the client from his or her debt. In both cases, there are consequences that can affect the client in a variety of ways, but ultimately, even when debt is completely erased, there are commitments to be kept.
Types of Bankruptcy
There are several types of bankruptcy, but only two that are available to individuals or couples: Chapter 7 and Chapter 13. Chapter 7, which includes asset liquidation, is the type that essentially releases the client from his or her debt. Chapter 13 is a less extreme type, but it also has less extreme consequences; it does not require asset liquidation so there is no chance of losing something important. Each type comes with its own pros and cons, and each type will stay on your credit for some time; however, if you truly need to file, the damage to your credit will be much greater if you do not file.
It is important to account for all of your assets in each type of bankruptcy. This helps your attorney best counsel you and the process go smoothly. In addition, lying about or omitting assets has serious consequences which are not pleasant. If you are confused about what assets are, you can ask your bankruptcy attorney in Sterling Heights; however, the basic idea is that assets are anything of value. Cars, houses, bank accounts, and even PayPal accounts qualify. As long as you account for your assets, meet with your creditors, and follow the process correctly, your bankruptcy will likely be approved, and you can finally start fresh.