Nowadays, the economy seems to be in shambles. As a result, more and more people are having to file for bankruptcy. Unfortunately, bankruptcy is being forced upon people, as their creditors have sued them to get paid. As a result of this sad situation, the article will cover the fundamentals of bankruptcy, as well as why you should use a lawyer when filing bankruptcy.

At this point, you are probably wondering why you would use a lawyer to file for bankruptcy. Obviously, if you have to claim bankruptcy, you don’t have any available money lying around.

However, because of the recent bankruptcy rule changes, you are required to use a lawyer during the bankruptcy process. Even though it doesn’t seem fair, the law is very specific in this regard.

Now that we know why you must use a lawyer, let’s look at the two types of bankruptcy law that you can file under. The first is Chapter 7 bankruptcy and the other is Chapter 13 bankruptcy. While there are other chapters of bankruptcy, these two chapters are by far the most common.

The first type, Chapter 7 bankruptcy is where you are forced to sell your assets in order to pay your creditors. Once you have sold your assets, any remaining debts are discharged by the courts. This procedure normally takes between 3- 6 months to execute.

Chapter 13 bankruptcy is where the court carefully reviews your financial situation and then sets up a repayment plan to pay off your creditors. This repayment plan usually last for three years. If you stick to the repayment plan, any remaining debts are then discharged by the courts.

While bankruptcy may seem like panacea from your debts, there are still debts the court can not discharge. Very simply, a court can not discharge student loans or taxes. Even if you file for bankruptcy, you are still liable for these debts.

In conclusion, we have discussed why you need a lawyer, as well as some bankruptcy fundamentals. If you are considering filing for bankruptcy, we highly recommend you contact a lawyer today to assist you in making the best decision for your situation.

This Wills EZine was established to help people learn about the various facets of wills.