It is fairly common for people in Utah to have some kinds of debt. People may own a home and have a mortgage, they also may have car loans, credit card debt, have personal loans, medical bills and other forms of debt. When people are working and able to make the monthly payments for these various debts, it is not a bad and actually allows people to make many big purchases they would not be able to make otherwise.
The debt can become a problem though if there is an unexpected event that causes people to lose their job. Without the income paying the debt may become difficult and also may force people to incur even more debt to keep making the monthly obligations. The debt may become overwhelming and people may wonder if they will be able to keep up or ever rid themselves of the debt. People who are in this position have options though and may be able to achieve a fresh start.
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Bankruptcy options
One option is that people may be able to file for bankruptcy. At the end of the process most of people’s debt will be discharged meaning that they will no longer be responsible for paying it back. There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Knowing the differences will help people choose the right option for them.
Chapter 7
This is an option only for people that meet a means test which determines how much debt people have compared to their income. So, some individuals will not qualify for Chapter 7. If they do qualify, the best part of Chapter 7 is that their unsecured debt will be discharged and this occurs relatively quickly. People will need to liquidate some of their property though to pay some debt. They will also be able to keep most property they acquire after the bankruptcy process is over.
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Chapter 13
Through Chapter 13 people have a repayment plan and will need to continue to make payments. At the end of the repayment plan any unsecured debt will be discharged. Through this process people are able to keep more of their property though. Chapter 13 stops foreclosure processes and repossession attempts and allows people to keep them after the repayment plan is done.
There are many people in Utah who may find themselves with overwhelming debt. People may be able to file for bankruptcy to help them achieve a fresh start. Experienced attorneys understand the differences of the options and know which option may be best for people’s situations. Consulting with an experienced attorney could be helpful.
