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When might filing for bankruptcy be the best option?

There are many people that are constantly fighting to keep their financial “head above water,” it may make sense for those that are totally overwhelmed by their debt to file for bankruptcy. There are a number of significant reasons why a bankruptcy attorney in Salt Lake City Utah might suggest this to be the best option:

  • Reduce monthly payments on certain debts such as an auto loan and retain the car

  • Get a completely fresh start with little or no debt

  • Put an end to all collection activity including garnishment of your wages and repossession attempts

How can you declare bankruptcy?

There are only two ways to declare bankruptcy; the most common and the most popular is to file voluntary bankruptcy. The only other way is for one or more of your creditors to force the issue by asking the court to declare you bankrupt.

Although there are only two ways to declare bankruptcy there are several ways to file, each of the ways has certain pros and cons. Before you decide which is best for your particular situation you should consult with a bankruptcy attorney in Salt Lake City Utah.

The two most common forms of bankruptcy that are used by individuals are Chapters 7 and 13.

  • Chapter 7: Chapter 7 bankruptcy is commonly referred to as “straight bankruptcy.” In Chapter 7 the bankrupt is required to turn all of his or her non-exempt assets over to a court appointed receiver who in turn disposes of the assets, turning them into cash. The cash is used to pay off as much of your debt as possible, the majority of the remaining debt is written off.

  • Chapter 13: Chapter 13 bankruptcy is the route most people that have assets they wish to keep go. This method of bankruptcy involves creating a plan to reorganize one’s debts over a period of three to five years. At the end of the agreed upon plan, any debts remaining are discharged. Chapter 13 is better for those with a predictable income.

Regardless of what approach you take to your financial problems always discuss the options with a seasoned bankruptcy attorney in Salt Lake City Utah.

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