Debt can become crushing when a person has done all they can to pay their bills yet still remains behind. Under the law, creditors have the right to fully pursue a person who owes them. They can garnish wages, make threatening calls and send letters. When a debtor has found themselves drowning in debt, it is crucial they are aware of their rights to file for bankruptcy. Bankruptcy can offer welcome relief and stop the process of collections.
There are two types of bankruptcy a private citizen can pursue, depending on their financial situation:
Those with mostly secured debts will find Chapter 13 offers relief from the stress. This type of bankruptcy allows a person to be given a specific period of time to overcome their debts with a restructured payment plan. Once the bankruptcy is in effect, the bill collectors must cease collection attempts, even if they were about to foreclose on a home or repossess property. Most people are given two to five years to pay off their debts and make a new start. The main requirement of this bankruptcy is for a person to have some form of income coming in each month so they can successfully pay off the debts they owe.
There is also an option for Chapter 7 bankruptcy. This type of bankruptcy is ideal for those who have mostly unsecured debts and want to settle quickly. Most people are able to finalize their bankruptcy in as few as six months. This type requires a person to pass a mean’s test and places a trustee in charge of liquidating any non-essential property and absolving certain debts. Once the debts have been absolved, a person can regain a better financial outlook.
To find out which type of bankruptcy will be best for a person’s financial situation, it is important they meet with an Attorney in Tacoma WA. An attorney can guide them through the process and help them to understand their options. Those in need of debt relief should contact an attorney right away and schedule a consultation appointment to get started on the process of overcoming crippling debt.
