Making the decision to file a bankruptcy case is not easy. It is important to look at all of your options, and understand both the benefits and negative effects of filing. These are some of the questions that must be considered:

• How badly do I need relief? Are creditors hounding me? Have I been sued? Am I facing a garnishment or foreclosure? Is the pressure of dealing with my debts (or not dealing with them) causing problems with my job, my health, my family relationships? Have I tried to work with my creditors to no avail?
• Do I qualify for bankruptcy relief? Most individuals qualify for relief under either Chapter 7 or Chapter 13. However, higher income individuals may be restricted to a Chapter 13 repayment plan.
• Will filing a bankruptcy case really help? Bankruptcy under either Chapter 7 or Chapter 13 will stop creditor harassment, foreclosure, garnishments and lawsuits. Some debts, however, cannot be completely discharged (wiped out) by a bankruptcy filing. These include recent income taxes, child support, alimony, and most student loans. Even if you are facing nondischargeable debts, bankruptcy may still help, though, by providing temporary relief and by freeing up income that had been used to service debt that can be discharged.
• Will I lose my property? In most bankruptcy cases, the debtor is able to retain his property. However, in most cases if the property is being used as collateral on a debt, a plan must be proposed to pay the creditor at least the value of the property in order to protect it.
• Can I afford the cost of filing a bankruptcy case? The best and most experienced bankruptcy law firms will provide a free initial consultation. You will meet with an attorney who will thoroughly evaluate your situation and fully discuss your options. He/she will explain the fees and costs involved and discuss what payment arrangements can be made. In Chapter 13 cases, the attorney fees are usually included in the repayment plan, so a case can be started with little money up front.

The most important thing to remember if you are considering bankruptcy is to get good advice from an experienced bankruptcy attorney. Bankruptcy law is a specialized field. Only a fully qualified, experienced attorney will be able to fully advise you and follow through with the best plan of action.

Everyone knows about the recent issues with the housing market. Many homes have lost value over the past couple of years. As a result, more and more people are facing foreclosure. Over 10 million American homeowners are “underwater” on their home. That means they owe more money on their mortgage loans than their house is worth. While bankruptcy will not solve every mortgage problem, in many cases foreclosures can be stopped and mortgages reinstated through the use of a Chapter 13 plan.
 
A Chapter 13 bankruptcy case allows an individual or married couple with regular income to deal with their debts by making regular payments to a Chapter 13 Trustee. The payments are made over a period of 3 to 5 years. The plan can cure an arrearage, or overdue balance, on a home mortgage over a 60 month term. A Chapter 13 bankruptcy filing can also deal with many other short-term debts such as credit cards, car loans, and medical bills. This can free up funds so that future mortgage payments can be made in a timely manner.
 
In addition, in many jurisdictions a Chapter 13 plan can remove or “strip off” a second or third mortgage on a house. In order to remove the second or third mortgages, the property value must be less than the total amount owed for the first mortgage. Once the lien is stripped off, the second mortgage can often be paid little or nothing through the plan. The remaining balance on the second or third mortgage is completely discharged at the conclusion of the plan.
 
Another huge advantage of Chapter 13 is that the case can be filed without a big upfront expense. With a Chapter 13 bankruptcy case, the homeowner’s attorney fees are included in the plan. The attorney fees are then paid during the course of the 3 to five year plan. In fact, a Chapter 13 bankruptcy case can be started for as little as $125 ($75 partial court costs and $50 credit counseling).

Filing a bankruptcy case is not a cure all. In some circumstances, however, it may make sense to clear out old debt that you cannot pay so as to focus on rebuilding credit using debt that you can keep current. It is rarely a good idea to file bankruptcy just to help rebuild credit, but there may be other good reasons to file. In some circumstances, it is the only way to get a fresh start. The decision to file a bankruptcy case should be made only after consultation with an experienced bankruptcy attorney.