If you and your family are caught in the midst of a financial crisis, bankruptcy may be your best option for getting your debt under control and reclaiming your life. Regardless of your circumstances, falling under an unmanageable amount of debt can be detrimental to your marriage, happiness, and mental health. If you are considering filing for bankruptcy to improve your life, it is important to know that you have a couple of different options available to you.
What is Bankruptcy
Bankruptcy is a process used under Federal Law that allows those in severe amounts of debt to be relieved of their financial burdens. It prevents creditors from pursuing payments or repossessing your assets. Bankruptcy can prevent your bank from foreclosing on your home and instead helps you to get caught up on mortgage payments. It allows you and your family to have a new start without debt and without losing your home or other valuable assets.
In New Hampshire, there are two ways you can file for bankruptcy— Chapter 7 and Chapter 13. How you need to file depends upon several factors. The bankruptcy lawyers at Seufert law can help you decide which is best, and help you navigate the process.
Chapter 7 Bankruptcy
In New Hampshire, a chapter 7 bankruptcy is defined as “liquidation where the trustee collects all of your assets and sells any assets which are not exempt.” This type of bankruptcy is most common among those who have large amounts of credit card debt and few assets. Chapter 7 does not always absolve you of your responsibility to pay your secured loans— such as a house or car loans. If you decide to keep your property that is secured by you are required to sign a “Reaffirmation Agreement” which reaffirms your commitment to the loan, and you must continue making the payments, otherwise, you elect which of these to give back to the bank (s).. With chapter 7 bankruptcy, there are a few types of debts which cannot be discharged these include child support, fines incurred from receiving a DUI, student loans, among other things.
Chapter 13 Bankruptcy
A chapter 13 bankruptcy is preferred if you are behind on your mortgage or business payments, and wish to keep your property. It is also the only option if you earn too much income to qualify for a chapter 7 bankruptcy or only have debts which are non-dischargeable. A chapter 13 does not ‘wipe out’ debt in the way that chapter 7 bankruptcy can, instead it allows for a person in financial distress to get caught up on their payments and prevents creditors from repossessing or foreclosing on their property. In this case, you propose a repayment plan to your creditors, usually over the course of 3-5 years, to become current on your debts and then return to the original terms of the loan. The amount you must repay is determined by the amount of your disposable income and a few other factors. To qualify for chapter 13, you must earn a regular income and have some disposable income to apply to your debt. The amount of debt to be repaid is determined as part of the New Hampshire Bankruptcy Means Test.
Bankruptcy Lawyers in New Hampshire
Regardless of your circumstances, you have options to help you manage your debt and regain control of your finances. The bankruptcy process can be complex and time-consuming, but the experienced bankruptcy attorneys at Seufert law are here to walk you through each step and ensure you are making decisions to benefit you and your family. If you have more questions or would like to schedule a consultation, contact us today.