Getting into debt is a reality many people face. Too many times, people find themselves stuck with too many payments and not enough income to cover them.
When faced with an endless barrage of collections calls and nasty letters, you may feel like there is no getting out. Fortunately, there are some remedies you can take to help set you on the path to financial freedom. A bankruptcy maryland lawyer may be able to give you options about restructuring your debt under the bankruptcy laws. While the thought of filing for bankruptcy is scary, understand how it can stop collections and start you out fresh.
Not All Bankruptcy Is Equal
Individuals faced with bankruptcy have two filing choices. Chapter 7 liquidates assets and unloads larger debts, wiping the slate clean. A Chapter 13 filing restructures debt to pay them down. Making a choice between the two may come down to personal preference and long-term goals.
In Chapter 7, a trustee goes through your debts and assets. The debts are put in a line from secured, like mortgages, to unsecured, like credit cards. Once your assets are calculated, creditors have the chance to meet with the trustee and plead their case for payoff or seizure of collateral. You can choose to cut the collateral loose and dismiss some debts. Others will be paid out of your assets, which the trustee facilitates. At the end of the bankruptcy period, what remains is discharged.
If you want to keep some of your secured debt, like a house or car, you may want to go the route of Chapter 13. This is a payment plan that you enter into with creditors. The trustee helps coordinate the arrangement. Going this way eliminates some or all of your debt in five years. You may not pay everything, but paying some helps your credit report bounce back quicker.
Bankruptcy attorneys can better assist you with the proper filing for your situation. Consulting one sooner rather than later may save you from the harassment of collectors.