Post a Comment On: Got Debt? Pensacola Bankruptcy Attorney Erich M. Niederlehner

Although bankruptcy filings are climbing back to the all-time high of 2 million reached in 2005, there is a growing concern that many Americans in need of bankruptcy protection are not filing. A recent article in USA Today quotes Katherine Porter, associate professor of law at the University of Iowa who says, “[T]he filing rate doesn’t even begin to count the depth of financial pain.”

Are you hurting financially? Bankruptcy can help ease that pain.

Bankruptcy is a federal legal process for declaring an inability to pay your creditors. When you file bankruptcy you get immediate relief. The bankruptcy court imposes an “automatic stay” prohibiting creditors from taking collection action against you while the bankruptcy case is pending. The automatic stay is very powerful and stops lawsuits, wage garnishments, and even foreclosures. Its purpose is to give the debtor some breathing room and an opportunity to decide how to resolve an overwhelming debt problem.

There are typically two different types of bankruptcy cases: chapter 7 and chapter 13. In chapter 7 you eliminate debt without payment while chapter 13 is a repayment plan over three to five years. At the end of a bankruptcy case the court enters an order discharging eligible debts and permanently prohibits creditors from taking collection action against you.

In some cases certain debts are not discharged. The most common types are family support obligations, student loans, and taxes. However, bankruptcy offers significant relief by discharging other debts and freeing up money to pay the non-discharged debt. Chapter 13 can also be helpful by allowing payment of the non-dischargeable debt under the supervision of the bankruptcy court and without fear of lawsuits, wage garnishments, or other nasty creditor action.

The bankruptcy process is very efficient. For most chapter 7 debtors the case will last a few months and requires one meeting with the bankruptcy trustee. The cost of bankruptcy is very reasonable compared to the relief that is given.

If you are hurting financially, speak with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can help you. There are many options available in the law and can give you real relief from overwhelming debt.