The Law Office of Kevin Mack, LLC Offers Bankruptcy Tips
How do you navigate filing for bankruptcy? To navigate filing for bankruptcy often requires legal help. The Law Office of Kevin Mack, LLC in Tiffin, Ohio, offers tips to help with filing and navigating bankruptcy.
While filing can be an emotionally draining experience, perhaps it will provide some comfort knowing that you’re not alone. After the COVID-19 pandemic, many people find themselves at odds with paying their debt. This situation is something no one should go through alone.
So let’s talk about how you can navigate filing for bankruptcy. First, we will give you a brief look at the relief types and resolutions available. Then, we’ll provide some tips on when you should start filing. Finally, we will show you how to navigate through the debt clearing process. Let The Law Office of Kevin Mack, LLC, enlighten you on how to navigate filing for bankruptcy.
A Quick Synopsis of The Inability to Pay Debts
According to USCourts.gov, filing bankruptcy can help a person eliminate or develop a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court. An individual, spouses together, or a corporation or other entity may file bankruptcy petitions. Along with the court trustee, the judge looks through your assets and liabilities. If they find you have no means to pay off your debt, you’ll start to go through the process.
Looking back, there are several different acts that helped citizens during difficult economic times. The Bankruptcy Act of 1898 said that creditors didn’t have to approve repayment plans. This act stayed until The Bankruptcy Act of 1978 passed, and these are the laws we follow today.
What Do the Different Bankruptcy Chapters Mean?
Even though the goal of bankruptcy is to clear debt, bankruptcies do not all work the same way. Today, there are six different types; they are:
Chapter 7: This is known as the most common type of bankruptcy. In this situation, the court sells all your assets so you can pay as much debt as possible. There is no amount of debt needed to qualify for Chapter 7.
Chapter 13: This situation is for individuals where the court approves a plan to repay your debt over three-to-five years. You keep your assets and receive time to get your mortgage arrears up-to-date. The court decides on a monthly payment plan along with a budget for you to follow.
Additional Bankruptcy Chapters for Specific Types of Debt
Chapter 12: This type of resolution allows farmers and fishermen to get on a payment plan for their debts to avoid foreclosure.
Chapter 15: Courts handle international bankruptcy in Chapter 15.
Chapter 9: This debt resolution offers repayment plans for towns, cities, and schools to pay back their debt.
Chapter 11: Used mainly for businesses, Chapter 11 creates a plan for running the company while paying off debt.
When Should I Meet With a Lawyer to Start Filing Bankruptcy?
Surveys show that job loss and medical debt are the two biggest reasons to consider filing. However, some other situations could cause you to meet with an attorney earlier to start the process. Here are some scenarios that may prompt you to consider filing bankruptcy:
- You’re going through a divorce.
- Creditors sue you for any late payments of debt.
- Your mortgage is many payments late and in danger of foreclosure.
- The only way to pay off debt is by using a credit card.
- You use one credit card to pay off another.
- You’re considering withdrawing money from a 401(k) account to pay bills.
How You Can Navigate Through the Process of Clearing Debt
If you lost your job or face insurmountable debt, you may consider filing for a chapter. You aren’t alone, as many individuals and businesses throughout the country have faced financial hardships recently. If you are considering filing, here are some tips to navigate through the debt-clearing process:
Avoid The Urge to Use Your 401(k)
While getting shackled with debt is never fun, avoid the temptation to use your savings to pay it off.
Don’t Let Cash Pile Up
Having an emergency fund is great, but creditors can seize money placed in bank accounts. Fortunately, there are other options to protect your money. You can put it into a Roth IRA, where you can withdraw any contribution tax-free.
Resist the Urge to Sell Everything You Own
Many people think it’s a good idea to sell possessions to pay off debt. In reality, the bankruptcy process can discharge some debts without giving up assets. Plus, some of your possessions can help you throughout the debt-clearing process.
Don’t Forget About Forbearance
Recently, many lenders now allow borrowers to skip one or more payments. This situation can be a welcomed opportunity, but should you take advantage of it? You can discharge many unsecured debts in Chapter 7. While it’s not ideal to erase secured debt via bankruptcy, taking advantage of forbearance options can save you money.
Contact Us for Bankruptcy Services and More in Tiffin, Ohio
The Law Office of Kevin Mack, LLC helps residents with bankruptcy services in Tiffin, Ohio, and surrounding areas. We have over 35 years of legal experience and believe that every debt resolution matter is important and unique. We use our expertise to fight for your rights and get you out of debt.
Our law office has an outstanding reputation for debt matters, credit repair, and other services. With our convenient location in Tiffin, we work with individuals and families throughout the state. Trust us for prompt and professional legal representation. Give us a call today to learn more about the many services we offer.