Bankruptcy filing must be considered only as a very last resort.

Bankruptcy is a way for those who are so far in debt they are unable to pay their bills to gain a fresh start. All bankruptcy cases are handled in federal courts. Once you officially file, your creditors are then legally prohibited from attempting to collect debts from you until the matter is sorted out in court. 

There are some misconceptions about bankruptcy, so let’s dispel those now. In addition to helping you discharge debts, filing may help to prevent a tax or mortgage foreclosure on your home temporarily, a vehicle from being repossessed, or wage garnishment. However, it is not a magic, cure-all pill for your financial woes. For example, if you owe money on your mortgage or auto loan, you will most likely still be required to make the monthly payments in order to keep them. While the option of working out a payment plan with creditors is there, some debts are not eligible to be discharged under bankruptcy. These include child support, alimony, most student loans, court-ordered restitutions and fines, and some taxes. Debts incurred after the filing of bankruptcy are also usually not eligible for discharge. 

There are two types of bankruptcy for individuals: Chapter 7 and Chapter 13. The main difference between the two is you ask the court to discharge your debts under the former, while you file a repayment plan with the court under the latter. 

As of December 2020, it costs $338 in court fees to file for Chapter 7 bankruptcy and $313 to file under Chapter 13. Therefore, it’s a big decision to file and one that should not be taken lightly. 

Wendy J. Cristophersen is a bankruptcy attorney serving the Buffalo, NY area. If you are drowning in debt, she can advise you of your legal options, as well as help you determine whether filing for bankruptcy is the best solution for your situation. We are a small firm with a big heart, so you can be sure you’ll get the compassionate and effective legal representation you deserve. Get in touch today and let’s get you started back on the road to sound financial footing!