On June 30, 2024, the US Courts reported 486,613 bankruptcy filings, up 16.2% from the previous year. During this time, business filings rose 40.3% to 22,060 and non-business filings rose 15.3% to 464,553. People and companies may feel trapped by rising debt due to financial difficulties; hence, the decision to file for bankruptcy.
Financial problems may warrant bankruptcy to restore financial stability and get a fresh start. If you are in the midst of a financial crisis, a personal bankruptcy lawyer can advise whether you should file Chapter 7, Chapter 11, or Chapter 13 bankruptcy based on your situation. Your bankruptcy lawyer can negotiate with creditors, file papers, and represent you in court to get fair results.
Your lawyer’s strategic advice covers asset protection, debt discharge, and post-bankruptcy credit rebuilding.
Understanding Bankruptcy: Types and Processes
Bankruptcy has saved many people from excessive debt, thereby enabling them to have a fresh start financially. It varies by category, with Chapter 7 and Chapter 13 being the most common.
Chapter 7 mostly discharges unsecured debts in a brief time span—off to a new beginning—but it’s also possible that some property would be lost during the process.
Chapter 13 is a plan of payment allowing debt settlement within 3-5 years while still being able to retain assets.
Bankruptcy lawyer Michael J. Thompson says in some states, like Kentucky, not all debt can be discharged by filing for bankruptcy. This is why it’s important to consult a bankruptcy lawyer who is familiar with your state’s laws before making a decision about how to handle your debts.
Knowing the best option depending on your situation can ensure you reach financial stability faster.
The Role of a Bankruptcy Lawyer
Handling bankruptcy is difficult and you’ll need a bankruptcy lawyer to guide you through the process. Your lawyer will guide you through the legal procedures and potential consequences of your case. A bankruptcy attorney can help you avoid errors that could postpone your case.
Assessing Your Financial Situation
Assessing your financial situation is the start of the bankruptcy process. Gather every document about funds, including income statements, bills about the claimed debts, and assets, to have a concrete picture of your liabilities and your financial health.
Then, tally the monthly income and expenses to determine whether you are living beyond your means and if you can sustain your expenses with your monthly income. Finding spending trends that cause financial pressure would also be beneficial.
Going Through The Bankruptcy Process
Small steps can make bankruptcy more understandable, but it might still seem intimidating. The first step is to compile records on assets, income, and debts owed. Then speak with a bankruptcy lawyer to determine whether Chapter 7 or Chapter 13 better suits your situation.
Your lawyer would help you submit the papers to officially present your case before the court; following the filing, creditors would gather and the debtor would be questioned about their finances.
Remember, some debts are removed once your bankruptcy application is granted, so you are allowed a fresh start. Your lawyer will make sure your actions are legally compliant and help protect your legal interests all throughout the process.
Life After Bankruptcy: Rebuilding Your Finances
After bankruptcy, the emphasis should be on rebuilding your finances while thinking about credit recovery. Income and expenses should be recorded and tracked using a thorough budget. This habit will, with time, help improve credit scores. It is important to pay your bills on time too.
For reestablishing credit history, keep the balances low on a secured credit card. Review your credit report as well to find mistakes and see where you stand. Having an emergency fund to assist you with any unexpected costs that could otherwise drive you back into debt is important.
The road to financial success may be long, but it is possible if you stay committed to your goals and develop discipline in the way you handle your finances.
HedgeThink.com is the fund industry’s leading news, research and analysis source for individual and institutional accredited investors and professionals
