Bankruptcy can provide you with a fresh financial start if you have been overwhelmed by debt. However, it’s essential to file under the right chapter to make the most of this opportunity and avoid undesirable consequences.
Are you looking to discharge your debts or create a repayment plan? Do you have valuable assets that you would like to keep? Knowing which chapter to file under is essential if you are contemplating bankruptcy, as it can help you ensure the best outcome for your financial situation. Here is why you should carefully consider your options.
You could lose your prized assets
Filing under the wrong chapter of bankruptcy can result in the loss of valuable assets. For example, if you filed for Chapter 7 but should have filed for Chapter 13, you may be required to liquidate some of your assets to repay creditors, which may not sit well with you.
Incomplete debt relief
You may be left with a significant debt burden if you file for the wrong bankruptcy. For instance, if you file for Chapter 13 but should have filed for Chapter 7, you may end up repaying more of your debts as they will not be discharged. You may not fully enjoy the benefits of bankruptcy as a result.
Legal complications
Filing the wrong bankruptcy chapter can lead to legal issues, especially if you have already begun the process. Switching everything mid-process can be complex and may require court approval, leading to further delays and additional fees. It could also expose you to recovery actions by creditors.
These are just but a few of the undesirable consequences you may have to deal with after filing under the wrong bankruptcy chapter. As such, it’s crucial to seek legal assistance for guidance on how things work, what to expect and the right chapter for your needs. Don’t take chances with your financial future—seek the help you need to make informed decisions and achieve the fresh start you deserve.