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If you find yourself facing an army of angry creditors due to a seemingly endless slew of unpaid bills, don’t panic. Bankruptcy may be the solution to kick insurmountable debts and get back on your feet financially. However, bankruptcy law is complex, and if you don’t know what you’re doing, you can end up in even more hot water, like facing charges of fraud. 

Bankruptcy Law FAQs

How Does Bankruptcy Work?

This depends on the type of bankruptcy you file for. The two most common among consumers are Chapter 7 and Chapter 13.

bankruptcy lawWhat Is the Difference Between Chapter 7 & Chapter 13?

The former focuses on liquidation: A trustee is appointed by the bankruptcy courts to seize your assets and sell them off to pay creditors—your remaining debts are then discharged. The latter focuses on reorganization: Your debts are restructured into a more manageable payment plan, which you stick to for four to five years until the remaining debts are discharged.

Which One Is Right for You?

This depends on the types of debt you have and eligibility criteria. For instance, Chapter 7 bankruptcy has an earnings cap—if you make more than a set amount of money per year, you don’t qualify. A bankruptcy attorney can advise you on which filing is best suited to your needs.

Can All Debts Be Discharged?

No. Bankruptcy law prevents the discharging of child support, alimony, and taxes, as well as most student loans. Examples of commonly discharged debts include credit card bills and hospital costs.

Will You Lose Your Home or Other Assets?

This depends on the type of bankruptcy you file. Chapter 13 allows you to retain a lot of your property; this is not the case for Chapter 7.

Is It Possible to Regain Good Credit?

Yes. Bankruptcy doesn’t have to mean bad credit for life. You can rebuild a strong score, for instance by obtaining a secured credit card and making regular, timely payments.

 

For a reliable bankruptcy law attorney in Hamden, CT, trust Steven P. Ciardiello, Esq., P.C.. With more than 30 years of experience, this lawyer is known for the wealth of knowledge he brings to the table—and his aggressive representation of his clients. You can learn more about his practice areas online. To request a consultation, call (203) 248-8000.

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