If you are thinking about filing for bankruptcy, it is likely you have quite a few questions and concerns. Today's post is brought to you by expert bankruptcy lawyers in richmond https://fishersandlerlaw.com/bankruptcy-attorney-richmond-va/.
The purpose of this article is to address some frequnently asked banruptcy questions that most individuals have before seeking a consultation. Let's get started.
What’s A Stay?
When an individual files for bankruptcy, he or she is generally granted a stay from any type of credit actions. This may prevent a foreclosure from proceeding in court or a civil case against you from being heard. Creditors typically cannot talk to debtors or take any action that may result in the debt being collected unless the debtor wishes to make voluntary payments. The stay generally stays in case until the bankruptcy case is completed.
What Assets are Liquidated to Pay Creditors?
Each state has a list of assets that are exempt from liquidation. Typically, a debtor does not have to give creditors any money in a retirement account or any equity that may have built up in a life insurance policy. Although a home may be liquidated in a Chapter 7 case, a homeowner may be able to keep some or all of the equity that he or she has built in the property. Personal belongings such as clothing or sentimental items are not liquidated, and creditors generally don’t want them anyway. Anything left that has any value will be sold at auction with the proceeds used to pay creditors. A bankruptcy trustee will be responsible for taking an inventory of a debtor’s belongings to determine what should be liquidated.
What Happens if There Is a Remaining Balance?
If there is a remaining balance after assets have been liquidated, creditors will be forced to take a loss. Generally, creditors are not allowed to take a debtor to court to recoup any remaining loan balance or balances that may exist after a secured property has been sold. Filing for bankruptcy to have debts discharged is often better than asking creditors to forgive a balance as forgiven debt is taxable while debt discharged in bankruptcy is not.
How Can an Attorney Help a Debtor Achieve Debt Relief Through Bankruptcy?
Attorneys can help debtors throughout the entirety of the bankruptcy process. For more on this process visit https://richmondbankruptcyattorney.business.site/ They may be able to ensure that paperwork is filed and given to the court on time, which ensures that a debtor’s rights are preserved. Legal counsel may also be able to work with creditors to increase the odds that they accept the bankruptcy petition without objection. Finally, an attorney can work with a debtor after a case is over if creditors make an attempt to collect on a discharged debt.
Struggling with debt is something that can cause emotional, physical and financial issues in an individual’s life. However, bankruptcy can be the way out when there no other viable debt relief options available. Working with an attorney, it may be possible to have a case resolved quickly, which gives a debtor a fresh financial start and the opportunity to learn from his or her previous errors.