Bankruptcy Attorney | Should I File Bankruptcy?

Bankruptcy Attorney.  For many individuals, filing for bankruptcy relief can provide a way out of debt and a fresh financial start. But whether or not a bankruptcy filing is in your best interest depends on many factors and your individual circumstances. Read on to learn more about what to consider if you are thinking about filing for Chapter 7 or Chapter 13 bankruptcy, and whether you should contact a bankruptcy attorney.

Should I File?

Will Bankruptcy Help You?

In general, it is a good idea to evaluate all of your options before deciding to file for bankruptcy. Before you file your case, think about the types of debt you have and the goals you want to achieve by filing for bankruptcy. A bankruptcy discharge doesn’t eliminate certain types of debt (these are called priority obligations). This means that filing for bankruptcy may not be in your best interest if all you want to do is wipe out debts that can’t be discharged in bankruptcy.

In addition, many creditors are willing to work with debtors to settle their debts. If you can afford to resolve your debts outside of bankruptcy, you may not need to file for bankruptcy.

To learn more about your options, see Alternatives to Bankruptcy.

Do You Qualify for Bankruptcy?

Both Chapter 7 and Chapter 13 bankruptcy have certain eligibility requirements. To qualify for Chapter 7 bankruptcy, your income must be low enough to pass the bankruptcy means test. To be eligible for Chapter 13 bankruptcy, the amount of your debts must not exceed certain dollar limits.

If you don’t make the required payments on your debts, your creditors can take you to court to recover their money. If a creditor obtains a judgment against you in court, it may be able to garnish your wages or place liens on your assets. (Learn more about the ways that creditors can collect debts.)

When you file for bankruptcy, an automatic stay goes into effect that stops almost all collection actions by creditors including lawsuits. If you are being sued by your creditors, filing for bankruptcy relief may help you stop the lawsuit and eliminate the underlying debt.

Is Your Lender About to Foreclose on or Repossess Your Property?

If you have any debts that are secured by your property (such as a mortgage or car loan), your lender can foreclose on or repossess your property if you default on your obligation. In most cases, you can’t wipe out your lender’s lien on the property by filing for bankruptcy and obtaining a discharge.

How Much Property Do You Own?

One of the most important things to consider before filing for bankruptcy is the value of property you own. Bankruptcy exemptions allow you to keep a certain amount of property in Chapter 7 bankruptcy. But a Chapter 7 bankruptcy trustee has the authority to sell any assets you can’t exempt to pay back your creditors.

If you file for Chapter 13 bankruptcy, you are allowed to keep all of your property but you will have to pay your unsecured creditors at least an amount equal to the value of your nonexempt assets. This means that if you have a significant amount of nonexempt property, filing for bankruptcy may not be in your best interest.

Should You Choose Chapter 7 or Chapter 13 Bankruptcy?

Whether it is in your best interest to file for Chapter 7 or Chapter 13 bankruptcy depends on numerous factors including:

the types of debts you owe
your income and expenses
whether you own any nonexempt property, and
what you hope to achieve by filing for bankruptcy. -nolo

Contact a Jacksonville Bankruptcy Attorney today. 

We are a small law firm of bankruptcy experts but we deal with big challenges each day. Whether our clients are businesses or individuals, many face serious financial issues. Others may not be as deep in debt but are still suffering due to the stress of their financial situation. Pinkston and Pinkston – Attorneys at Law can help.

We have been specializing in Bankruptcy Law for over 20 years.  Contact us today!