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Life During Bankruptcy

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If you are considering the bankruptcy process, you may have experienced a devastating life event such as a major medical illness, the loss of employment, or a divorce. Oftentimes, bankruptcy can be the result of other life events that result in the inability to pay overwhelming debt or financial obligations. While you may be considering bankruptcy, you may have many questions regarding the process and how your life will look during the course of the bankruptcy and after the process is over. Remember that the decision to declare bankruptcy is a financial one, not a moral one. This process was created to ensure that U.S. citizens have the right to a financial fresh start. Understanding what the bankruptcy process entails and how it will impact your life can help you make the best decision for your unique circumstance.

Chapter 7 vs. Chapter 13 

There are two types of bankruptcy options available for individuals in the United States. You may choose to file either a Chapter 7 or Chapter 13 bankruptcy. The quick distinction between the two is that Chapter 7 will allow you to discharge many of your debts, but many of your assets will be liquidated as well, while Chapter 13 bankruptcy will require you to establish a repayment plan for 3 to 5 years but allows you to retain many of your assets.

Bankruptcy Length

Chapter 7 bankruptcy is a relatively short process taking a few months, and your life will be only slightly inconvenienced through the process. Chapter 13 bankruptcy takes a full 3 to 5 years to complete, as you will be making monthly payments to your creditors under a repayment plan.

Public Information  

If you make the decision to file for bankruptcy, both Chapter 7 and Chapter 13 bankruptcy, much of your information will be made available to the public. Additionally, your employer may discover that you have declared bankruptcy if you file for Chapter 13 bankruptcy, as they may be required to issue certain payments prior to cutting your paycheck through the repayment plan created. While this may seem a burden, it is a burden worth taking as the bankruptcy process is important for a financial fresh start and does not carry the stigma from previous decades.

Bill Payment

When you declare bankruptcy, you will stop making payments on your pre-petition debt.  Some bills you should pay, such as domestic support obligations (child support and alimony), utilities, rent and lease payments, condo or homeowners association fees, most takes, and insurance. Contact your attorney to help you understand how to pay debt during your bankruptcy process.

Contact Us Today for Professional Help 

Bankruptcies offer a fresh financial start to those who are facing insurmountable debt. There are very specific laws and deadlines that relate to both Chapter 7 and Chapter 13 bankruptcies.  Contact one of our experienced West Palm Beach bankruptcy attorneys at Kelley, Fulton & Kaplan at 561-264-6850 for a free consultation regarding what type of bankruptcy you should file, how to go about the filing process, which of your debts will be discharged, and how your life will look during the course of your bankruptcy.

Resource:

uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics

https://www.kelleylawoffice.com/ignoring-debt-collectors/

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