Recent years have seen deepest recession since the Great Depression, a housing market crash, new healthcare laws, and a spike in unemployment and many divorces. With all of these factors at play, many people are left with overwhelming debt and wondering if bankruptcy is an option to help them out of their own financial struggles. Throughout our career of helping people declare and file bankruptcy, we’ve noticed a few questions that people usually ask.

Here are 5 of the most frequently asked questions about bankruptcy:

1. Should I file for bankruptcy?

This is the most common asked question from individuals who are truly struggling under the burden of debt. There are so many factors to take into account when deciding whether filing for bankruptcy is right for you. Attorney J. Michael Hall and his associates at The Hall can help you determine whether you are in a position to need a bankruptcy attorney. Take our quick, 60-second financial check up quiz, and you can quickly determine whether bankruptcy might be a good choice for you.

2. What’s the difference between Chapter 7 and Chapter 13 bankruptcy?

Chapter 13 bankruptcy is sometimes called “reorganization” bankruptcy because it allows the individual to simply reorganize debt into a manageable repayment plan. The bankruptcy laws take into consideration income, expenses, value of property, and debt to help the individual establish a repayment schedule. Often, creditors will be required to reduce or remove interest and reduce the amount of debt owed.

Also called “liquidation” bankruptcy, Chapter 7 bankruptcy is best for individuals who have little or no ability to repay debt. When filing Chapter 7, it is important for individuals to recognize that some non-exempt property may be lost in exchange for discharging debts. Only a consultation with a bankruptcy lawyer can give you clear answers to which is right for you, but understanding that basic differences between the two can help you in conversations with your attorney.

For a more in-depth understanding, read our article on the blog: Should you file Chapter 7 Bankruptcy or Chapter 13 Bankruptcy?

3. Should I wait until I am in foreclosure or being sued to file for bankruptcy?

The short answer is, no. The longer you wait to speak to a bankruptcy lawyer, the further behind you will become. In addition to the mental stress this can put on you and your relationships, it has a negative affect on your credit, as well.

When you begin to experience significant difficulty in repaying your debt, rather than exhausting important assets such as retirement, it is best to speak to a bankruptcy attorney. Having this conversation sooner, rather than later, will save valuable time and resources.

4. If I file for bankruptcy, will I lose everything?

Some people worry that filing for bankruptcy will lead to loss of a home, vehicle, retirement, or other necessities. When filing under Chapter 13, the idea is to create a repayment schedule you can handle so as to be able to keep your possessions. Even when an individual files under Chapter 7 of the bankruptcy code, there are some exempt assets that cannot be seized.

Each state has a list of exempt assets, including equity in your home, cars, tools, furniture, retirement accounts, etc. The exemptions, while limited, o help consumers avoid losing their homes and vehicles. However, it is always best to speak with a bankruptcy attorney to find out how the law will apply to your specific case.

5. Will bankruptcy be affected by my unemployment compensation?

The quick answer is no. One of the most common causes of bankruptcy is unemployment. Loss of a job, especially unexpectedly, can lead to a great deal of financial hardship. Unemployment can actually help you qualify for Chapter 7 bankruptcy.

In any bankruptcy proceeding, an individual is required to complete a test to see which bankruptcy is proper. This test is called a “means test” which compares your income against national standards.. Your income is compared to the median household income of other households in your state. If your income is below the median, taking into various considerations, you may qualify to file under Chapter 7. Unemployment, obviously, can have a bearing on your net income.

What now?

While this article is not exhaustive, we have found that these are the most frequently asked questions we answer regarding bankruptcy. If you are considering filing for bankruptcy in Bulloch, Effingham, Candler, Jenkins, Toombs, Evans, Screven, Bryan, or Tattnall County, the attorneys at The Hall are here to help you every step of the way. You can begin the process by simply filling out our brief bankruptcy case evaluation . Our online bankruptcy case evaluation will help us quickly determine the best way our bankruptcy law team can help you.

The thought of filing bankruptcy can seem scary, but speaking to a bankruptcy lawyer before your situation becomes even more overwhelming can help reduce your stress. Bankruptcy filings are designed to help consumers who, for whatever reason, have become overwhelmed by their debt. There is no need to be nervous about talking to a bankruptcy attorney. An experienced bankruptcy attorney will be able to offer advice and guidance to help you through the process. In fact, The Hall offers consultations so that you can get the help you need without adding to your financial worries.

Hall and Navarro, serve most of Georgia, including Effingham County, Bulloch County, Screven County, Candler County, Evans County, Toombs County, Jenkins County, Bryan County, Tattnall County and surrounding areas. The law offices are located in Springfield, Georgia and in Statesboro, Georgia.

The attorneys at Hall , PC provide focused and experienced representation from your initial consultation until the resolution of your legal matter. We offer a broad range of legal services and are dedicated to serving individuals and businesses.

Fill out our FREE bankruptcy case evaluation and one of our dedicated team members will be in touch with you to schedule your consultation.

Please consult an attorney for advice about your individual situation. This site and its information is not official legal advice, nor is it intended to be. Feel free to get in touch by e-mail, letters or phone calls. Contacting us does not create an attorney-client relationship. Until an attorney-client relationship is established, please withhold from sending any confidential information to us.