Filing Bankruptcy: Watch Before You Jump

In the case of unpaid debts, it is recommended to call or email law firms before attempting any desperate measures, such as raiding the retirement plan, transferring property, or transferring credit card balances. Consult bankruptcy attorneys before making such hasty decisions.

Make sure experienced bankruptcy attorneys are contacted if one has been sued or if there is a pending judgment. Once a judgment has been entered, the underlying debt becomes a secured debt and can be paid through bank account seizure, wage garnishment, or property seizure.

Keep in mind that bankruptcy is not a good solution if you are elderly and / or have no assets that a creditor can garnish (social security wages, for example) or are sixteen years old. Even if one has nonexempt assets and debts, such as student loans, an Atlanta bankruptcy attorney always advises against filing for bankruptcy.

It should be known that bankruptcy for individuals is of two types: Chapter 13 and Chapter 7. A Chapter 13 bankruptcy is also known as a “salaried plan.” In this scenario, debts can be paid by people in a period of 3 to 5 years without paying interest on the debt payment. You cannot be sued while using the Chapter 13 plan and you don’t even need to sell your property or assets to make payments. However, Chapter 7 is a liquidation bankruptcy, which helps people pay off their unsecured debt efficiently. Homes are seized only when you are currently not in the mortgage payment, and even then you can work with an Atlanta bankruptcy attorney to modify these payments outside of the bankruptcy case.

Filing for bankruptcy is not the only way to make debt payments. It is important to decide which mode to select, based on the ability to pay of each. One of them is loan modification. Bankruptcy attorneys can help you negotiate with lenders, lower your car and house payments, and also prevent foreclosure. Another mode that can be considered is debt settlement. When there is simply not enough balance on credit cards or medical bills to cover the cost of bankruptcy, debt settlement is an alternative. However, it is important to be careful of companies that claim to remove certain items from the credit report, as they are scams. Sometimes debt settlement ends up being ineffective, as one ends up paying a portion of the reduced payment to the debt settlement company each month, for “negotiating.”