Eligibility Conditions
Just because you may be eligible for bankruptcy doesn’t mean you should. Always start by trying to work out an arrangement with creditors or restructuring your lifestyle or living arrangement to have more money to put toward expenses. If these are options, then seek out the help of a bankruptcy attorney.
Payment Plans
Filing for bankruptcy is a way to discharge some of your debt. However, not all debt gets taken away. You are still responsible for paying what you can on your account until the court closes your case. You will also have to choose which form of bankruptcy you are going to file. Both impact your credit for years to come, but Chapter 7 allows the court to liquidate your assets in order to pay off some of the debt. In Chapter 13 filings, you are required to pay your debt back over a certain period of years, though it is the trustee that takes your payment then distributes it accordingly.
Lasting Effects
Filing bankruptcy may relieve you of your immediate financial burden, but it doesn’t happen overnight. There are several forms that must be filled out, and you will potentially have several hearings or meetings with your attorney, creditors, and the bankruptcy trustee. In fact, when you file for bankruptcy in California it could be several months before your case is put through.
Bankruptcy is often the last option for those struggling to pay their bills. With the recent economic impact of COVID-19, there is an expectation that the coming months will see an increase in bankruptcy filings across the country.