Currently we are going through an unprecedented health and financial event due to COVID-19.  As a result, many hard working people are being furloughed or even losing their jobs.  This will result in a severe financial strain. If you’ve found yourself with insurmountable debt under your present circumstances, you may feel overwhelmed and unsure of what to do. Bankruptcy may offer a solution. Here is a brief guide to what bankruptcy is and what it can do. 

A Guide to Bankruptcy 

What Bankruptcy Is 

Bankruptcy is a legal process that provides an avenue for an individual or organization to achieve debt relief. It is reserved for situations in which the debtor owes a substantial amount and cannot pay it. Filing bankruptcy temporarily stays any foreclosure or repossession of assets and stops creditors from harassing you for money. 

Types of Bankruptcy 

There are three main types of bankruptcy. Chapter 7 refers to individual petitions, while Chapter 11 applies to business reorganization and rehabilitation, and Chapter 13 applies to wage earner’s plans.

Under Chapter 7, debtors with little income or assets can liquidate their assets and leverage them to pay off some or all of their debt. The court may discharge some or all of the remaining debt, allowing you to have a clean slate.

Chapter 13 is usually recommended for people with a regular income and allows the debtor to renegotiate payment terms with their creditors. This allows the individual to make smaller payments and keep assets such as their house and car. 

Advantages & Disadvantages 

Bankruptcy is a means to escape the burden of debt legally. It can help you save significant assets such as your business or home and allow you to have a fresh start in your financial life, depending on what kind of bankruptcy you opt for. Bankruptcy is not for everyone and has it’s drawbacks, but in many cases it can help and give you a fresh start.  

If you’re saddled with debt and unsure of your next move, consult with a lawyer at the Law Offices of Frank E. Turney, P.A. Located in Catonsville, MD, 21228, this practice is the legal representative of choice for individuals throughout the Baltimore area. From bankruptcy to personal injury and DUIs, they assist with a broad range of legal concerns. Call (410) 788-­8830 or email Turneylaw@verizon.net to speak with Mr. Turney or a member of his staff. Or visit the website to learn more about the firm and its practice areas.