Bankruptcy is one of many tools that can help people that are overwhelmed in debt. For most people, there are two types of bankruptcy protection available: Chapter 7 bankruptcy and Chapter 13 bankruptcy. These two types of bankruptcy protection are both effective and are both designed around the idea to give the debtor a “fresh start” on their finances, but they each have advantages and drawbacks. Experienced bankruptcy lawyer Charles Grainger can help you determine the best course of action to help you get out of the hole.
Chapter 7 bankruptcy protection affords the debtor a “fresh start” with their finances on a much quicker timescale than Chapter 13. Chapter 7 can swiftly and efficiently eliminate almost all forms of general unsecured debt. This means that credit card debt, medical debt, pay day loans, and most signature loans can be wiped clean through a Chapter 7 bankruptcy. Chapter 7 also allows the debtor the opportunity to walk away from secured debts and lease contracts; however, if the debtor chooses to walk away from a mortgage or an automobile loan, for example, then the debtor will have to surrender the property associated with that debt.
Debtors also have the option to reaffirm secured debts in a Chapter 7 bankruptcy if they are current on their loan payments to that creditor. If they are behind, for example, on a car loan, then the option of reaffirming that particular loan is no longer a viable option. This can often serve as a hurdle to those who want the protection of a Chapter 7 bankruptcy. Let attorney Charles Grainger help you explore your options and see if Chapter 7 bankruptcy protection is the best option for you.
Chapter 13 bankruptcy is a payment plan lasting three to five years depending on your financial situation. Under Chapter 13, a debtor can catch up arrears on a car loan, a mortgage, or even pay the balance of their car note off through a Chapter 13 payment plan. Sometimes a Chapter 13 plan will only have to pay back a debtor’s secured creditors, while paying nothing to the debtor’s unsecured creditors.
In other instances, unsecured creditors will be paid through what is commonly referred to as a “pot” of funds; this results in the debtor’s unsecured creditors being paid pennies on the dollar. Sometimes, an individual’s situation requires that their Chapter 13 payment plan pay back 100% of their unsecured creditors. Montgomery bankruptcy attorney Charles Grainger can help you determine the best way he can help you get out of the hole – whether that’s through a fresh start under Chapter 7, a payment plan under Chapter 13, or a non-bankruptcy option.
Montgomery bankruptcy attorney Charles Grainger can evaluate your financial situation and give you advice about long-term solutions that are tailored to your particular situation and will truly help you get out of the hole. We serve clients in from our offices located in Montgomery, Prattville, and Troy, Alabama. You can text or call us at (334) 260-0500 or contact us online to schedule a consultation.