Consumer Bankruptcy Lawyers in Dumas, Arkansas
Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is usually considered as an option of last resort, because while it can stave off financial disaster, it has some significant long-term consequences warranting careful consideration of the costs and benefits. Bankruptcy is controlled by federal law, and proceeds in federal courts. So, the process for filing for bankruptcy in Arkansas will be very similar to the process everywhere else in the U.S. However, individual bankruptcy courts have different rules for exemptions, so it might be a good idea to consult with a local lawyer in Dumas, Arkansas before filing.
Chapter 7 Bankruptcy in Dumas, Arkansas
In Dumas, Arkansas, there are 2 main types of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates part of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many forms of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and essential personal items, like clothing. These assets are not available to creditors.
Once the eligible property is sold, and the funds transferred to the creditors, the dischargeable debt is excused. Some forms of debt, however, can't be discharged in Chapter 7 Bankruptcy in Dumas, Arkansas. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be discharged, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Dumas, Arkansas
In Dumas, Arkansas, chapter 13 is extremely different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 bankruptcy does not eliminate debt, it restructures it. This involves a court coming up with a new repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original agreements that created the debt in the first place. This creates a new payment structure, usually involving a single monthly payment, that the debtor should find manageable.
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Which Type of Consumer Bankruptcy Should I File in Dumas, Arkansas
Chapter 13 is usually a good option for people who have a stable income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a stable income, Chapter 7 might be more beneficial.
In any case, you should talk with a local Dumas, Arkansas bankruptcy lawyer. Your lawyer can advise you of your options and inform you of their likely consequences. This will make it much easier for your to make an informed choice.