Should I File for Bankruptcy?

By: Joshua B. Swigart

Nobody anticipates having to file for bankruptcy. But more often than not, we’re faced with financial hardships and paying down debt becomes an impossible task. In today’s economic climate and as people are faced with the prospect of not working for an indefinite period due to Covid-19, paying down debt becomes a secondary concern after paying necessary expenses such as housing, food and utilities. While filing for bankruptcy may not be an ideal solution, sometimes it’s the best one.

Let’s look at what the different options for personal bankruptcy are and whether it’s the best option for you.

There are two major types of personal bankruptcy that apply to consumers. Chapter 7 bankruptcy allows debtors to discharge all or part of their debt while you surrender your assets. This is mainly used for debts such as personal loans and credit cards. Generally, Chapter 7 is the most common option for individuals.

Chapter 13 bankruptcy allows you to repay all or part of your debt through a three to five year repayment plan. The bankruptcy court reviews your debt, consolidates it, and you then make a monthly payment to a court trustee who then distributes the money to your creditors.

In order to qualify for Chapter 7 bankruptcy, you must pass certain qualification. For example, your income must be less than the median income for your family size in your state. You also must agree to receive credit counseling from an approved agency, and the majority of your debt must be unsecured. If you do not meet Chapter 7 qualifications, then you will need to file for Chapter 13 bankruptcy.

Chapter 13 is best suited when you can afford to pay some bills, but the overall debt is too much to pay off. It allows consumers to pay a more manageable sum for unsecured debt such as credit cards, medical bills and personal loans, while protecting your secured debt such as cars and property.

Bankruptcy can be difficult to navigate by yourself. Trust an expert to help you determine which solution is best for you. If you’re facing financial hardships and think bankruptcy may be a solution, contact Swigart Law Group for a free consultation.

Swigart Law Group helps people who have been injured by banks, employers, drug and medical companies, or large corporations, and creates a meaningful and profound impact on the lives of people in the community. Our attorneys are experienced in the areas of consumer protection, privacy and data breaches. Unlike large law corporations, we hand-pick every case we take and we give each of our clients undivided personal attention.