The recession and its aftermath have made life harder for many Americans. If you are unable to make ends meet while also paying down your debts, bankruptcy may be an effective solution. Here are some useful steps to take if you are considering filing for either Chapter 7 or Chapter 13 bankruptcy.
Step 1: Compile All of Your Financial Statements
Receiving one overdue notice after another can seem stressful, but you may not know the real extent of your debts until you sit down with all of your financial documents to assess the full situation. Sit down and add up your credit card statements, personal loans, home equity lines of credit, and any other outstanding debts you may have. This can paint a more comprehensive picture of your net worth and asset profile, and may help you decide whether bankruptcy is the right course of action.
Step 2: Learn More About the Bankruptcy Process
Chapter 7 is a great option for households with large quantities of unsecured debt that may not own many large assets. Meanwhile, Chapter 13 is effective for those who may be facing foreclosure and need the courts to intervene in order to force their lenders to agree to favorable terms. Since the mechanics of each process differ, it is important to educate yourself on the differences between the two options.
Step 3: Meet With a Local Attorney
All households have a slightly different financial situation. For this reason, it is essential to meet with an experienced bankruptcy attorney before filing any paperwork. A lawyer will be able to tell you whether a Chapter 7 or Chapter 13 petition can positively affect your specific debts and assets. This initial consultation is often free, and it can save you a great deal of hassle if the process is not right for you.
Cutler & Associates is a Chicago-area law firm whose bankruptcy attorneys have years of experience helping Illinois residents file for both Chapter 13 and Chapter 7 bankruptcy. We offer free initial consultations and have six officers throughout the area, so call us to get started today!