Don’t let overwhelming debt control your life. The Law Office of Robert Wachtel provides compassionate legal guidance, helping you navigate bankruptcy for a fresh financial start.
It’s simple to get lost in the complex maze of personal finance. Many people find that the burden of excessive debt is suffocating, keeping them in a never-ending cycle of worry, stress, and financial hardship. Although bankruptcy is stigmatized, for some people it’s a viable and frequently required route to financial freedom rather than a dead end. It is a legal tool intended to give people a new beginning by enabling them to restructure their financial commitments or discharge specific debts while maintaining court protection.
We at the Law Office of Robert Wachtel are aware that declaring bankruptcy is a very personal and frequently challenging choice. In order to find the best course of action for your financial future, we offer thorough, empathetic, and transparent legal advice.
Knowing the Signs When Debt Becomes Unmanageable
How can you determine whether filing for bankruptcy is the best course of action for you at this point? It’s not about being careless; rather, it’s about life’s unforeseen turns, such as health crises, job loss, divorce, or economic downturns. The following are some telltale indicators that your debt has gotten out of control and that filing for bankruptcy may be a good option:
- Minimum Wages Are Insufficient: Your credit card balances never seem to go down, and you can only make the minimum payments.
- Taking Out a Loan to Cover Bills: You’re using credit cards, cash advances, or new loans to pay for necessities like groceries, utilities, and rent.
- Continuous Creditor Calls: You’re under a lot of stress due to the incessant calls you’re getting from debt collectors and creditors.
- Lawsuits or Wage Garnishment: You have already been notified of a lawsuit or wage garnishment, or creditors are threatening legal action.
- Giving up necessities: You frequently miss rent or mortgage payments, utility bills, or auto payments in order to pay off other debts.
- No Emergency Fund or Savings: You either have no emergency fund left at all or your emergency fund has been completely spent to pay off your debt.
The first brave step to taking back control is recognizing these symptoms.
Did you know?
Over $6,000 is the average amount of credit card debt in an American household. For many, this debt is unsecured and can be paid off through bankruptcy, providing a genuine fresh start!
Recognizing Your Choices: Comparing Chapters 7 and 13
Chapter 7 and Chapter 13, the two most prevalent forms of personal bankruptcy, are each intended for distinct financial circumstances:
Chapter 7 Bankruptcy (Liquidation): This is sometimes called “straight bankruptcy.” It entails paying off the majority of unsecured debts, including personal loans, credit card debt, and medical bills. You have to prove that your income is below a specific threshold in order to pass the “means test” and be eligible. While most filers keep all of their property, some non-exempt assets may be sold in Chapter 7 to satisfy creditors.
Chapter 13 Bankruptcy (Reorganization): This option is for people who can pay back some of their debts and have a steady income. It entails drafting a repayment schedule, usually spanning three to five years, to settle all or some of your debts. Chapter 13 can protect co-signers, stop foreclosure, and stop a car from being repossessed.
Making a decision between these chapters necessitates a careful evaluation of your goals, assets, income, and financial status; this is best accomplished with the assistance of an experienced bankruptcy lawyer.
What Bankruptcy Can Offer as a Route to a New Beginning
Although difficult, filing for bankruptcy can result in a great deal of relief and a real route to financial independence:
- Debt Discharge: Chapter 7 may provide a full discharge for qualified debts, relieving you of any statutory repayment obligations.
- Prevent Harassment of Creditors: The majority of collection calls, lawsuits, and wage garnishments are immediately stopped once you file thanks to a “automatic stay.”
- Structured Repayment: Chapter 13 offers a court-approved, manageable repayment plan that gives you time to get back on track and breathing room.
- Financial Education: Credit counseling is frequently necessary for bankruptcy, which aids in the development of better future financial practices.
- New Hope: For many people, the biggest benefit of bankruptcy is the psychological relief it provides—the removal of the heavy weight of debt, which frees you up to concentrate on creating a more secure financial future.
Bankruptcy may be the methodical way to attain financial independence if you’re drowning in debt and looking for a clear way out.
Contact the Law Office of Robert Wachtel at (973) 715-8294 for a private consultation and knowledgeable advice regarding your financial circumstances.
Frequently Asked Questions (FAQs)
Will filing for bankruptcy permanently damage my credit?
Although bankruptcy will initially have a negative effect on your credit score, it is not a permanent condition. Chapter 13 and Chapter 7 bankruptcy remain on your credit report for seven and ten years, respectively. However, by responsibly managing new credit, many people start to rebuild their credit rather quickly after being discharged. The long-term advantages of getting rid of excessive debt frequently exceed the short-term effects on credit.
If I declare bankruptcy, can I keep my house and vehicle?
Your unique situation and the type of bankruptcy will determine this. You can frequently keep your home or vehicle equity in Chapter 7 if it is within the state exemption limits. As long as you continue to make your mortgage and auto payments as part of your repayment plan, you can usually keep all of your property in Chapter 13. How exemptions apply to your case can be explained by an attorney.