While bankruptcy can eliminate crippling debt and give you a second chance at financial freedom, the decision to file is significant, and you should consider many factors before you make it. A bankruptcy attorney can help you review your situation thoroughly and make the best choice. The Law Offices of J. Baron Groshon has been helping residents of the Charlotte, NC, area find financial solutions for almost three decades and shares three crucial aspects to weigh before you opt for bankruptcy.
3 Factors to Consider Before a Bankruptcy Filing
1. The Type of Bankruptcy You Want to File
Most individuals choose Chapter 7 or Chapter 13 bankruptcy to deal with personal debt. Chapter 7 eliminates most unsecured debts through asset liquidation while Chapter 13 reorganizes debts into a more manageable payment plan. There are advantages and drawbacks to each, and you should discuss them with an attorney to determine the best filing for you. In general, Chapter 7 is ideal for people with little or no income and Chapter 13 is best for those who have money remaining after paying their monthly bills.
2. Your Eligibility to File
If you pursue Chapter 7 bankruptcy, you must pass a means test to ensure you meet the minimum qualifications for filing. The test verifies the ratio of low or no income vs. high debt. Chapter 13 bankruptcy also has strict eligibility requirements, as your debt must fall under a certain level and your income must exceed a set amount. When you meet with a bankruptcy attorney, they will help you determine your eligibility for filing.
3. What Would Happen to Your Home
Do you want to keep your home or sell it to help you make a fresh financial start? Knowing the answer to this question and others is important when searching for solutions to debt. For instance, liquidating your home would give you more money to put toward repaying your debts, but keeping it would help you rebuild your credit if you can manage the payments. Your bankruptcy attorney will explain your options.
By considering these and other factors before filing for bankruptcy, you will feel confident in your decision. To discuss your situation with a bankruptcy lawyer, call The Law Offices of J. Baron Groshon at (704) 342-2876 to schedule a consultation. Attorney Groshon also offers representation in estate planning, probate, Social Security disability and other matters. Visit the firm’s website for more information about their practice areas and like them on Facebook for additional legal tips and news.