Debt Consolidation Credit Counseling In Phoenix

Many Americans find themselves in the unfortunate situation of considering bankruptcy to help them with their debt problems. Among the most common questions about bankruptcy, most people want to know what will happen to their assets if they decide to go through with the process. To understand this, you must first understand the different forms of bankruptcy.

The most common form of bankruptcy is chapter seven bankruptcy. This is the kind that most people think about, and it is meant to completely wipe out your debts. In exchange for eliminating your debt, you will have to forfeit certain assets to help pay off your debt.

The other major form of bankruptcy is called chapter 13. Instead of just getting rid of your debt completely, chapter 13 is meant to form a payment plan to help you get back on track. This is often used to help people get caught up with their mortgage payments, and the repayment plan usually last 3 to 5 years. The good part about chapter 13 is that you don't have to forfeit any of your assets.

As you can see, chapter seven would be the choice for most people who are trying to get rid of their debt. However, chapter 13 can be useful in certain cases such as trying to get caught up with your mortgage payments.

Now, you probably don't have all that many assets if you've reached the point of filing for bankruptcy. It's no surprise that most chapter seven bankruptcy cases are considered no asset cases, which means that the consumer doesn't have anything worthwhile to sell.

Most people are mainly concerned with two common assets: the house and the car. In most cases, you're covered to a certain extent by a homestead exemption. The details vary by state, and this also depends on how much your house is worth and how much you still owe on it.

As we stated above, there are many details to be worked out, which is why it is so important for you to find a bankruptcy lawyer to help you through the process. Otherwise, you're unlikely to be able to navigate all of the legal jargon and reach your goal of debt relief.

Still, you should continue to learn as much as possible about your options from articles like this one before you speak with your lawyer. This can help you become a more informed consumer and get through the process more efficiently.