Bankruptcy is not the easy way out of debt. In fact, there are some things that bankruptcy will do, and others that it will not. Bankruptcy stops harassing phone calls and letters from debt collectors. The bankruptcy court issues a temporary stay which halts collection activities. Additionally, one can eliminate credit card and other unsecured debts. However, chapter 13 filers will have to pay back a portion of their unsecured debt.
Hiring a Bankruptcy Lawyer in Des Moines is the best way to handle a bankruptcy. A lawyer consults with the debtor and advises how the bankruptcy will affect them. Bankruptcy does not relieve certain debts like child support and alimony. These are obligations that survive bankruptcy. Another example of a debt that is not forgiven is student loans. Some student loan debt may be discharged if the filer can show an “undue hardship.” Furthermore, bankruptcy does not erase past due state and federal taxes. The Bankruptcy Lawyer in Des Moines explains it is very difficult to eliminate tax debt.
Chapter 13 is essentially a repayment plan over three to five years. Filers keep their property, but they have to make a monthly debt payment. Indeed, most of the filer’s disposable income goes to the bankruptcy plan. Debtors must pay back certain debts in full and are able to cram down others. This means debts can be reduced to the replacement value of the property securing it. For example, many people are paying more for houses than they are actually worth. The mortgage holder may be willing to forgive part of the debt. The Bankruptcy Lawyer in Des Moines may suggest filing chapter 7. In Chapter 7, the bankruptcy trustee cancels most of the filer’s debt. However, they sell the filer’s property to pay creditors. The debtor is basically putting their financial future in the hands of the bankruptcy court. The bankruptcy trustee will see that your creditor’s are repaid as much as possible. The more assets the trustee recovers, the more they are paid. Indeed, the trustee reviews a filer’s paperwork looking for hidden assets. That is why Hiring A Bankruptcy Lawyer in Des Moines is so important. The lawyer makes sure you are treated fairly.
