If you are struggling with debt, you are not alone. According to some statistics, the average American household is in debt to the tune of more than $100,000.
Personal debt comes in many forms, including credit card balances, mortgages, student loans and medical bills. Whatever the reason, once you're in debt, it's hard to get out of it. Should you suffer a job loss, an illness, an injury or another unexpected financial setback, you may find your debt problems nearly impossible to resolve without help.
At J G Moody Law PLLC, we help people with a variety of types of debt relief, including debt workouts and offers of compromise. Perhaps the most powerful tool for getting out of debt is personal bankruptcy.
Unfortunately, there are many misconceptions about bankruptcy. On this bankruptcy FAQ page, we will try to help clear up some of that confusion by answering some commonly asked questions.
What Is Bankruptcy Protection?
Perhaps the most important aspect of bankruptcy is that it protects you from your creditors. As soon as you file for personal bankruptcy, the court issues an automatic stay on any collection actions against you. This means that creditors can not harass you with phone calls, letters or anything else until your bankruptcy period has ended.
How Long Does Bankruptcy Take?
The answer to this question depends on what type of personal bankruptcy you choose. The two main types of personal bankruptcy are Chapter 7 and Chapter 13.
The process for Chapter 7 takes about 4-5 months. The process for Chapter 13 takes 3-5 years. To learn more, see our Chapter 7 vs. Chapter 13 page.
Will You Lose Everything In Bankruptcy?
This is one of the most common questions people have about the bankruptcy process. The answer is no. Even under Chapter 7, which is known as a liquidation bankruptcy, there are many exemptions that will allow you to keep your most important assets.
Can Anyone File For Bankruptcy Protection?
There are a number of eligibility requirements for both Chapter 7 and Chapter 13 bankruptcy. Perhaps the most important aspect of these requirements is known as the means test. This is a process in which the court reviews your income and compares them to your expenditures, and compares both to the average income and expenditures in your area.
Can You Borrow Money Again After Bankruptcy?
The short answer is yes. However, your bankruptcy will be reported to credit agencies, and it will stay on your credit score for 10 years. You may be able to borrow immediately after bankruptcy, but it will be at a higher interest rate than it ordinarily would be.
We want our clients to not only get out of financial trouble, but to stay out. We help them learn how to rebuild their credit after bankruptcy and return to financial health.
Is There A Best Time To File For Bankruptcy?
The answer to this question depends greatly on your specific circumstances. When you come to us for help, our lawyer can review your situation and advise you on your options.
That said, timing can be a very important factor when filing bankruptcy papers. For instance, the means test looks at your income over the past six months. In some cases, it may be wise to wait. In other cases, there is no time to lose. However, if you are facing financial difficulties, talk to a lawyer as soon as you can to learn about your options.
To speak to a skilled attorney and get started learning about your debt relief options, contact J G Moody Law PLLC today by calling us at 801-224-1666 or send us an email. We offer a free initial consultation.
We represent clients in Orem, Utah, and surrounding communities such as Provo.
J G Moody Law PLLC is a debt relief agent. We help people file for bankruptcy under the U.S. Bankruptcy Code.