People overwhelmed by debt they cannot repay may find themselves being forced to file for bankruptcy. If you have to file and you live in New Mexico you should immediately find a good lawyer in your area, such as an Albuquerque bankruptcy attorney
. Filing for bankruptcy can have a lot of negative effects, such as costing money and lowering your credit score, but there are also some good things that can come of it depending on your situation. When preparing to file for bankruptcy you first need to decide whether you should file for Chapter 7 or Chapter 13 bankruptcy.
Out of the two main types of bankruptcy Chapter 7 is the most straightforward. Here most, and possibly all, of your debts will be completely cancelled in a brief three to six month period. This process is relatively quick and easy. Chapter 13 bankruptcy is a little more complex and it takes a lot longer. Here you will make payments on your debts for three to five years before they are discharged. You will need to figure out which kind of bankruptcy will benefit you the most. Below are some specific ways bankruptcy can be a good thing.
Bankruptcy can terminate certain types of liens. A lien is the permission your creditor has to take away some or all of your assets. To avoid losing these things there are various procedures you may invoke during your bankruptcy case depending on your specific situation. For example, Chapter 13 bankruptcy will allow you to stop a mortgage foreclosure and keep any nonexempt property. Going along with this, terminating liens will also help stop creditors and collection agencies from harassing your for money. Annoying phone calls and letters are easy to stop if bill collectors are crossing the line, but if they are about to foreclose on your mortgage or repossess your automobile then that is a more serious matter.
Filing for bankruptcy
will put an automatic stay on these harmful activities and hold collection agencies and creditors at bay while the case is still active. This may just give you the time you need to repay your debts to these people and avoid losing your property and other assets. Filing for bankruptcy is also a great way to wipe out certain unsecured debt, such as a credit card. A creditor does not have any sort of lien to take your property an assets when you fall into credit card debt, unless you have a secured credit card. Bankruptcy is actually designed to help you eliminate credit cards and other types of unsecured debt, so they can be very beneficial in this aspect.
Of course, as we mentioned before, filing for Chapter 13 bankruptcy means you will still have to repay a portion of your debt. However, once your payment term is up then any remaining debt will be discharged from your possession. Filing for bankruptcy can be a good thing for many people. If you are wondering whether or not bankruptcy is right for you then feel free to speak with a lawyer or other financial adviser. They will be able to look at your specific situation and determine the proper path for you to proceed on.