Bankruptcy is a legal process allowing an individual or business to have some or all of their debt absolved. It is almost always considered as a last resort because it can have some negative long-term consequences which must be considered, even if you ultimately decide that they are outweighed by the benefits. Bankruptcy is governed by federal law, and proceeds in federal courts. So, the procedure for filing for bankruptcy in Rhode Island will be very similar to the procedure anywhere 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 attorney in West Greenwich, Rhode Island before filing.

Chapter 7 Bankruptcy in West Greenwich, Rhode Island

There are 2 main types of bankruptcy in West Greenwich, Rhode Island. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 liquidates some 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 types 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 basic personal items, like clothing. These assets are not available to creditors.

Once the non-exempt property is sold, the rest of the dischargeable debt is eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in West Greenwich, Rhode Island is not dischargeable, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy in West Greenwich, Rhode Island

Chapter 13 bankruptcy in West Greenwich, Rhode Island is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 bankruptcy does not excuse debt, it restructures it. This involves a court coming up with an altered repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original contracts that created the debt in the first place. This creates a new payment structure, normally involving a single monthly payment, that the debtor should find manageable.

Which Type of Consumer Bankruptcy Should I File in West Greenwich, Rhode Island

Which Bankruptcy type to file under depends heavily on the facts of each particular case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.

In any case, it would be a good idea to consult a local bankruptcy attorney in West Greenwich, Rhode Island. Your attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).