Indiana residents who are confronted with financial challenges can find themselves in that circumstance for many reasons. These include medical debt, job loss, overspending on credit cards, marital problems and more. On top of the bills, creditor harassment is a never-ending cycle of phone calls, letters and messages that can multiply the stress a person's feels and will impact them negatively. Regardless of how a person got into the situation, it is important to know that they are not trapped and there are alternatives to get on stronger financial footing. Bankruptcy is one way to do that.
While many people might have a negative perception of bankruptcy, it is wise to understand the facts before dismissing it. The idea that a person is ignoring his or her responsibilities or committing an unethical act is misplaced. Bankruptcy is perfectly legal whether it is a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. Before moving forward, the circumstances will determine which is preferable to that individual.
Chapter 7 is a liquidation bankruptcy best suited for those without significant assets who can face the aftermath and start over from scratch. Chapter 13 is for those who own a home, an automobile and other assets and would like to retain them. With Chapter 7, the debts will be cleared. Any assets that are of value will be sold to pay back creditors. Chapter 13 is for those who earn a living and want to keep from losing their home or automobile. There will be a time-period for which the payments will be made. It can be three to five years, but the five-year plan is most common. Payments will be sent to a trustee who will distribute payments to creditors. This can lower the amount the person was paying every month and after the plan is completed, their debts are cleared.
Debtors are often pleasantly surprised by the available options and the positive benefits filing for bankruptcy grants them. Not only will it give them debt relief, but it can help them regain peace of mind. Calling a law firm that has helped many Indianans with bankruptcy and getting over financial problems is the first step.