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 a creation of federal law, and goes through federal courts. Therefore, the procedure governing bankruptcy in South Dakota will be roughly the same as it is anywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Hot Springs, South Dakota before you file.
Chapter 7 Bankruptcy in Hot Springs, South Dakota
There are 2 common types of consumer bankruptcies in Hot Springs, South Dakota: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is absolved. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, basic personal items, and retirement accounts.
Once the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some types of debt, however, can't be absolved in Chapter 7 Bankruptcy in Hot Springs, South Dakota. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Hot Springs, South Dakota
Chapter 13 bankruptcy in Hot Springs, South Dakota 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 Hot Springs, South Dakota
Chapter 13 is normally a good option for people who have a steady 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 steady income, Chapter 7 might be more beneficial.
In any case, you should talk with a local Hot Springs, South Dakota bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely outcome. This will make it much easier for your to make an informed choice.