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When you are swimming in debt, ignoring phone calls from creditors, facing a repossession or foreclosure, and your mailbox is filling up with lawsuits and letters from collectors, it can feel as though your life is spinning out of control. But, is bankruptcy really the right debt solution for you? And if it is, which personal bankruptcy option should you choose? While there are a number of factors to consider in reaching the answers to those questions, and a qualified attorney is best suited to guide you, the following information on bankruptcy basics will help you understand the basics.

Common Types of Personal Bankruptcy

Both Chapter 7 and Chapter 13 bankruptcies allow you to manage or eliminate unsecured debts and stop the proceedings of foreclosures, garnishments, repossessions, utility shutoffs, and debt collections. However, child support, alimony, fines, some types of back taxes, and most student loan debts may be exempt, leaving you still obligated to pay them. Additionally, both may allow you to keep certain assets (within your state’s maximum valuation), such as a car or primary residence. But, this is where the similarities for the types of bankruptcies end.

In a Chapter 7 bankruptcy, sometimes known as “straight bankruptcy,” you will be required to sell all non-exempt assets, including (but not limited to) vehicles, work-related tools, basic household furnishings, and additional properties. In some cases, this sale must be completed by a court-appointed trustee. In others, the items may need to be turned over to the creditor. Once your bankruptcy is discharged, you must wait another eight years before you can file again.

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TX bankruptcy lawyer, Texas chapter 7 attorney, The decision to file for personal bankruptcy is not one that is easily made. Moreover, the days, weeks, and months following the decision can also be difficult, as there may be feelings of fear or concern. Then there is still the stress of preparing for the bankruptcy process. The following may be able to help alleviate some of that stress and provide guidance on how to find the assistance you need.

Start by Contacting an Attorney

While there are many steps to take during the bankruptcy process, your first should be to contact an experienced bankruptcy lawyer. Not only does this help you prevent missteps during the bankruptcy process, but it can also expedite the next steps. By contacting a lawyer, you can get you on your way to less stress from the creditor calls and collection letters.

Cancel Your Automatic Payments

If you are like most consumers, you have automatic payments that are drafted from your account. Some might be for subscriptions while others might be with creditors, all should be eliminated. This can help you start to step forward and manage your debt more responsibly. It also gives you more control over what you are paying in the weeks leading up to the bankruptcy filing.

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Affordable Care Act, Law Office of Chance McGhee, medical bill debt, medical bills, paying medical bills, personal bankruptcy,Texas bankruptcy attorneyEven though the enrollment deadline for healthcare under the Affordable Care Act just passed, it is clear that medical bills are still a big problem for many Americans. According to NerdWallet, one in every five Americans will have difficulty paying medical bills this year. Medical bills are actually the leading cause of personal bankruptcy filings, once individuals and families have used savings, credit cards, or attempted to refinance their homes.

While around 20 percent of people are struggling with medical bills in one form of another, three out of every five bankruptcies is due to medical bills. In fact, nearly 10 million Americans with year-round healthcare will still be unable to pay their medical bills. Many families look for ways to cut costs, including skipping vital prescription medications. Others will turn to loans, credit cards, or other financing methods. Some of those families, however, will find themselves facing bankruptcy.

One catastrophic medical event can set an individual or family back. An unexpected diagnosis or major accident can lead to many months or years of treatment, racking up bills. Those who are covered by health insurance may overestimate the extent to which their policy will help them, and some may find out too late that they are buried in bills that they can never hope to pay. And even when a good faith effort is made to pay down a selection of bills, it may still be impossible to catch up.

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