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If you’re a borrower struggling with debt, Chapter 7 and Chapter 13 bankruptcy offer a variety of advantages, including a fresh start on your financial life. While the benefits are valuable, the complexity of the process makes it hard to determine the ideal solution. Below are answers to a few questions that may help you decide which debt relief path to take.

Bankruptcy: 4 Frequently Asked Questions

Do I Have to Surrender My Property?

Often, those who file for Chapter 13 bankruptcy will not have to give up their assets, as they will be paying back a substantial portion of their debts. In Chapter 7 bankruptcy—also known as a liquidation—the trustee may seize some of your property to pay back your creditors. Luckily, the law exempts a wide swath of property, so you may be able to keep your vehicle, tools, and even some heirlooms.

Can Bankruptcy Prevent Foreclosure?

bankruptcyCreditors with sufficient income who file for Chapter 13 bankruptcy may be permitted to keep their homes if they keep up with a court-managed payment plan. Chapter 7 filers, however, are often unable to prevent foreclosure. In fact, if you have sufficient equity, the trustee may seize real estate to pay off your creditors.

Should I File for Bankruptcy as Soon as I Lose My Job?

Once you file for bankruptcy, you won't be able to seek protection again for several years, so it may be in your best interest to wait. If you expect to incur additional debts in the immediate future, waiting will allow you to discharge as much debt as possible.

Does Bankruptcy Stop Harassment?

Both Chapter 7 and Chapter 13 bankruptcy programs enact an automatic stay, putting an immediate stop to all collections activity. This includes phone calls, letters, repossessions and wage garnishments.

 

With more than 65 years of combined legal experience, the attorneys at Cecil & Cecil PA in High Point, NC, have helped countless clients reclaim their lives from debt. Visit the website to learn more about their bankruptcy services today, or call (336) 883-8383 to discuss your debt relief options with an experienced attorney.

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