In these days of the economic downturn which has affected the world in general, many people find themselves pushed into a corner financially and apparently with nowhere to turn. This is the time then to turn to the bankruptcy attorney to try to sort through the mess and work out what can be done. A bankruptcy lawyer will have the skills to salvage as much as possible from this extremely stressful situation and get the individual back on the road to financial recovery as fast as possible.
It is not always necessary to lose everything of course and this is where people make a big mistake and start to sell off all of their possessions in an effort to get themselves out of trouble. But what they should do as soon as the red light begins to flash is to go directly to a professional who will be able to guide them through what can sometimes be a difficult and lonely path.
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For example, those who have heavy credit card debts and who find themselves unable to cope with the constant harassment from the credit card companies should first look for a professional who will advise them. Putting this case into court and filing for Chapter 7 or Chapter 13 may give them the breathing space that they need to regroup and work out a payment plan that suits both parties.
Chapter 7 basically says that if the card owner has no money then the debt can be wiped out. How this is done is not so simple but the judge will order a means test to be carried out on the card owner. After taking into consideration reasonable expenses, and this will not include frivolous spending for sure, the judge will see whether there is any excess income or not. If there is not then the credit card debt will be wiped from the books completely.
If there is excess after the means test has been applied, then the judge will work out a payment plan over several years for the debtor to repay what he owes. This is called Chapter 13 and is only applied where reasonable expenses are met and where there is an excess of funds left.
The one truly great thing about both of these filings is that once the case has been registered in the court then the harassment from the credit card companies or creditors has to cease immediately. No more letters or phone calls or even embarrassing calls to the home from debt collectors who can sometimes be a little unruly.
Many would say that this is rewarding bad behavior by debtors who fall onto hard times but they can only avail themselves of this service every seven or eight years or so. This is certainly not an easy way out since they will be restricted severely after the case has been heard and are unlikely to qualify for another credit card in future. Credit scores too will reflect this occurrence and this may bring problems in future.
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