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The word "bankruptcy" tends to strike fear into our hearts, especially if we're going through financial trouble. But most people can't see themselves ever filing for bankruptcy. The process seems like it's made for failing businesses, government bodies, and other organizations. But personal bankruptcy laws exist to protect citizens who find themselves struggling with severe debt. If your finances drop into the red zone, taking the following steps will get you back on your feet: Assess the Damage Look closely at your financial portrait. If you owe large sums to multiple creditors, if collectors are calling your house, or if you find yourself paying for essentials with a credit card, you should start to consider remedying your situation. Begin by tallying up your financial assets - bank account balances, retirement funds, stocks and bonds, real estate, vehicles, and anything else of value. Once you have a grand total, compare it to the amount you owe. If your assets are worth less than your total debts, you should seriously consider filing for bankruptcy. How Do I File? You may voluntarily file for bankruptcy as soon as you determine it's necessary. Alternatively, you may be compelled by your creditors to file. However your legal process originates, don't try to navigate it by yourself. Get in touch with bankruptcy lawyers who will look closely at your circumstances and advise you on how to proceed. There are two different claims you can file, so an attorney will help you determine the legal route that best serves your interests. Filing a Chapter 7 Claim A Chapter 7 claim is fairly straightforward. If approved, this claim liquidates your assets and uses them to pay off a large chunk of your debt right away. In other words, it turns most of what you own into cash, and then distributes this cash among your creditors. It sounds scary, because you lose most of your holdings. But it's not the end of the world - many people bounce back and rebuild their assets without all that debt holding them back. Especially with trusted bankruptcy lawyers on your side, this process can lead to a much-needed fresh start. Filing a Chapter 13 Claim Since they involve seizing most of the filer's holdings, Chapter 7 claims aren't great for people who own businesses, property, and other major assets. When you have large properties that you don't want to lose, a Chapter 13 claim is the better choice. It allows people with consistent, predictable annual incomes to pay off debts over a three- to five-year grace period. Once a judge approves a Chapter 13 claim, creditors must stop contacting the debtor. The debtor then continues to work, paying off his or her debts as best they can during the grace period. No property or other assets are liquidated in this process. Bankruptcy lawyers will tell you: filing isn't so scary, and can drastically improve your situation. If you're letting unpaid bills stack up and trying to ignore them, know that you can pursue legal options to relieve the stresses of debt and protect what you own. When looking for bankruptcy lawyers in Baton Rouge, residents visit Murray & Murray, LLC. Learn more at http://www.murraylaw.net/Bankruptcy-Lawyer-Baton-Rouge-LA.html.
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