A Bankruptcy Lawyer in Kailua-Kona, HI Can Help You Get Back on Your Feet

Having more bills than you can afford to pay can be frustrating. Most people in this situation didn’t get that way because they went on spending sprees or were irresponsible with their credit. Like you, many of them paid their bills on time until a significant event happened that threw them off track financially. In today’s economy, job loss or a medical crisis can be devastating to a person’s credit. A bankruptcy lawyer in Kailua-Kona, HI can explain your options for getting bank on your feet.

Individuals and married couples have two options for legally discharging their debts. The first option is declaring Chapter 7 bankruptcy, and this is the most popular choice for people who have struggled with debt to the point that they have few, if any, assets and do not own a home. Chapter 7 bankruptcy is a way to eliminate bills like credit cards and medical debt. After going through the court, the debts are erased. If you choose this option, you will never have to repay these debts and the original creditor or their representative cannot ask for payment from you.

This form of bankruptcy will have a significant impact on your credit score. It may not be a good plan if you have other options. A notation will remain on your credit report for 10 years, and may prevent you from getting credit with reasonable terms in the foreseeable future. Despite these drawbacks, many people still choose Chapter 7 because their credit was already severely damaged due to missed and late payments. Over time, credit may be available again to someone who filed for this kind of bankruptcy.

The other option is a Chapter 13 debt reorganization plan. Your bankruptcy lawyer in Kailua-Kona, HI may suggest you choose this type of bankruptcy if you are facing foreclosure and want to keep your home. You must have a stable income to use this plan to save your house, and repay your outstanding debts over three to five years. However, after the repayment period is over, you may be able to erase all of your credit card and medical debts that were not repaid through your payment plan.

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