Job loss is creating a lot of stress among people. Not only is the loss of income overwhelming, but the loss of health insurance is devastating. Options are available to employees that have been laid off. They have the opportunity to keep their health plan for a certain amount of time, but that opportunity comes at a substantial cost. Unfortunately, most people cannot afford the premium. Once out of work, the bills begin to rack up, medical visits can be expensive and a medical emergency is financially devastating. If you find yourself in this position, it might be time to consult with a bankruptcy lawyer.
Your attorney can take a look at your financial situation and let you know what the best option would be. A Chapter 13 may be recommended if you have sufficient household income to satisfy payments. In this case, a plan is established for you to pay back your overdue debts over a period of time, as set by the trustee. Types of payments that may be included in this plan are mortgage defaults, past due credit cards, medical bills, loan deficiencies and in some cases, even past due taxes. In this type of filing, you must have enough income to take care of both your current bills and the payment plan amount. If this is not possible, then a Chapter 13 is probably not a good option.
In this case, the bankruptcy lawyer might recommend a Chapter 7 filing. This allows you to get rid of all of your bills except for alimony and child support, along with state and government obligations. There are certain criteria that must be satisfied in order to qualify for this type of filing. The criteria will take into account your earnings, if any, all of your liabilities and your assets. Your net worth will be calculated. If you have too many assets, your trustee may sell these items off, or liquidate them. The proceeds then go to the creditors. You are, however, allowed to have a limited amount of assets that you can keep. In addition to your personal belongings such as clothing, furniture, bedding, and the like, you are also allowed property and cash up to a certain value.
Once you have established your intent to file, you will need to take a credit-counseling course either on the phone, online or in person. Once this is finished, your attorney can proceed. After paperwork is filed, a meeting of the creditors will be held. You will need to attend this meeting. Your creditors may or may not appear. In many cases they will not appear. It will be you and the trustee. The trustee will ask you questions to make sure you understand the details of what you are doing, along with the impact it may have on future credit. He might also ask questions pertaining to the cause of your debt. Be honest and briefly explain what lead you to this point. He is not judging you, just merely making sure you did not rack up the bills just to purposely dispose of them.
After that meeting, you will have to partake in an additional course, which deals with financial management and education. When this is complete, you will provide your certificate to your legal consular. Soon after, you will be discharged from the ordeal and be on the road to your fresh start.
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