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Bankruptcy 101: Different Types Of Bankruptcy

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August 20, 2019

There is a stigma against filing for bankruptcy, but know that bankruptcy laws exist to protect both you and creditors. No one should have to live with debt hanging over their head. Bankruptcy should be a last resort. It’s always a better option to reduce your debts or work out a payment plan that you feel you can follow. You can also explore alternatives like credit counseling, financial coaching, negotiating with creditors, loan modification, and refinancing. 

McCue Law Office bankruptcy attorneys understand that everyone’s situation is unique, which is why we offer free consultations to help you better understand your options. In today’s blog, we’re outlining different types of bankruptcy claims that we help our Bangor clients use to find relief from debt.

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Chapter 7 Bankruptcy

Most of the people who come to our Bangor office for relief are thinking of this type of bankruptcy claim. Through chapter 7, you can discharge your debt within a few months of filing your claim. If you’re looking for fast relief from overwhelming debt, then chapter 7 many be for you. It is the most common form of consumer bankruptcy and used by many people to relieve debt from medical bills, credit card debt, and personal loans. You may have to give up some assets, like a car or jewelry, and your credit will be effects for 10 years following filing. 

You should know that there are alternatives to chapter 7 relief. Bankruptcy law is nuanced, and our bankruptcy attorneys are experts at helping our clients find the relief that is best for them. But chapter 7 can also be the type of relief you’re looking for. Unlike chapter 13, there is no need for a repayment plan.

Chapter 12 Bankruptcy

Chapter 12 bankruptcy is called Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income. Many fishermen and farmers come to our Bangor office looking for relief, and it’s important for small business owners to know that this particular section of bankruptcy law exists.

In order to file for chapter 12, you must have a stable income that can support a plan and the majority of your debt must be from your farming or fishing operation. Our McCue Law Office bankruptcy attorneys will help you file a petition and propose a payment schedule. Contact us to learn more.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy protects individual debtors with a regular source of income. Our bankruptcy attorneys encourage many of our clients to file for this type of bankruptcy because it allows you to keep a valuable asset, like a home, as collateral while making a plan to repay creditors.

If you choose to go this route, you’ll propose a repayment plan to the court that you believe is fair and that you can follow through on. If the court approves your plan and you complete the necessary payments, you can be discharged of a significant portion of your debt at the end of the period.

If you are following the payment plan, you will be protected from lawsuits, garnishments, and other creditor actions. 

McCue Law Office Bankruptcy Attorneys Bangor

McCue Law Office in Bangor is committed to helping our Maine clients find relief from overwhelming debt. If you need a fresh start, contact one of our bankruptcy attorneys today. 

Our law office specializes in personal injury, bankruptcy, social security disability, workers’ compensation, and real estate. Put our 30 years of experience to work for you!

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