When the economy moves as sharply downward as it has in the United States in recent times, many people suddenly find themselves in situations that seem completely untenable. However, despite the emotional stress that always arises when someone experiences financial troubles, there is almost always a solution available. One of the potential solutions for those who need to climb out from under a pile of mounting debt is the protection and fresh start provided by filing for bankruptcy protection. However, no two financial situations are ever exactly alike, which means that anyone who considers this step should seek the help and advice of an Oklahoma bankruptcy lawyer.
One of the most tangible benefits of filing for bankruptcy protection is that it will usually help to reduce the amount of debt a person owes and will provide him or her with a fresh financial start. Generally, when someone files for bankruptcy, his or her debts and assets are included on the initial documents that are filed with the Bankruptcy Court. Depending on the type of bankruptcy someone chooses to pursue, many of these debts will either be eliminated altogether or reduced.
For instance, if someone files for protection under Chapter 7 of the United States Bankruptcy Code, he or she will liquidate the assets available up to a certain point of legal protection. The proceeds from this liquidation are then applied to the debts that existed at the time of the filing. Other than debts that cannot be eliminated, such as tax debts and student loans, the remaining amount of debt will be ‘discharged’ by the court, which means that they are basically eliminated.
If a person chooses to file under Chapter 13 of the United States Bankruptcy Code, he or she will propose a payment plan that dedicates a certain amount of income to the repayment of existing debts. Once the plan is approved and ultimately completed, any remaining debts that can be discharged under the laws of bankruptcy will be eliminated when so ordered by the court. When this occurs, those creditors can no longer continue to pursue collection of these debts.
Many people wrongfully think that filing for bankruptcy protection will ruin their credit ratings. However, the opposite is often true. As long as there are debts in existence that someone cannot pay, those past-due accounts will continue to appear on a credit rating until they’re paid off or otherwise closed. Filing for bankruptcy protection starts that process of closing those accounts, which can actually improve a credit rating and ultimately start the clock that ticks towards the removal of these entries from a credit score.
If you are faced with financial problems that do not seem to provide a solution, contact the Oklahoma bankruptcy lawyers at Oklahoma Legal Center today to schedule an initial consultation. It’s time to plot a course for financial recovery so that you can recapture your peace of mind and start the process of ending these problems.