When home and car owners fall behind in mortgage and car payments, the fear, stress and anxiety can be overwhelming. Overwhelming debt can be difficult for struggling consumers to face each day which is why they should at least be familiar with legal protections and options available to them.
There are different types of personal bankruptcy protection that are available to help struggling consumers who either want to restructure their debts or liquidate their assets to repay creditors and enjoy debt relief and a fresh financial start. Different life events, such as the unexpected loss of a job or healthcare crisis, can result in an inability to pay the bills as they continue to stack up. This can be devastating to homeowners and others who wish to repay their bills.
The first thing that struggling consumers considering bankruptcy should know is that once they file for personal bankruptcy protection, an automatic stay goes into effect that protects them from creditors and halts all creditor collection actions while the bankruptcy process progresses. There are two types of personal bankruptcy protections that may be helpful to struggling consumers including Chapter 7 bankruptcy protection and Chapter 13 bankruptcy protection.
Chapter 7 bankruptcy protection allows the struggling consumer to liquidate debts to repay creditors and Chapter 13 bankruptcy options help the struggling consumer reorganize their debts to repay them over time. Each personal bankruptcy protection option can be helpful for struggling consumers in different situations which is why they should understand how to evaluate their options to enjoy debt relief.