Is Bankruptcy a Form of Debt Relief?
Struggling with debt under any circumstances is extremely stressful, and you may be weighing different options that could provide you with some relief. How can you get debt relief? And can you get debt relief through a bankruptcy filing? The term “debt relief” is commonly used in a range of ways, and you might be wondering if it is an official term that either does or does not include bankruptcy, or whether it is a term that is less defined and simply refers to forms of relief that a consumer can seek from their debt. There is no direct and easy answer to this question, and it often depends on who you ask. But a key piece of information to know is this: bankruptcy can bring relief from consumer debt, and our West Palm Beach bankruptcy lawyers can help.
Defining Debt Relief
Depending on who or what entity you ask, the term “debt relief” can mean different things. As a knowable term, the US Consumer Financial Protection Bureau (CFPB) defines debt relief relatively narrowly in relation to “debt relief or settlement companies that say they can renegotiate, settle, or in some way change the terms of a person’s debt to a creditor or debt collector.” Working with debt relief companies “can be risky,” the CFPB underscores, and emphasizes that it is not often best in practice for most consumers who are struggling with debt.
Yet more broadly, companies like NerdWallet include consumer bankruptcy within the category of “debt relief,” along with more informal negotiations with creditors or debt collectors that a consumer lawyer can assist you with before you move toward bankruptcy or consider one of the types of debt relief options the CFPB describes. And in even broader terms, “debt relief” can simply refer to any action that relieves your debt, including Chapter 7 or Chapter 13 bankruptcy for consumers.
How Does Bankruptcy Relieve Debt?
Bankruptcy can provide a relief from debt in different ways, depending on the type of bankruptcy you file for.
Chapter 7 bankruptcy is a type of liquidation bankruptcy. This kind of bankruptcy involves the liquidation of non-exempt assets, and after a relatively short time period that is typically around four to six months, your eligible debts can be discharged and you can get a fresh start. In other words, you will no longer be responsible for debts that are discharged. Chapter 13 bankruptcy lasts much longer — usually three to five years — and allows debtors to restructure their debt over time and, ultimately, to have some remaining debt discharged at the end of the bankruptcy case. This kind of reorganization bankruptcy can make debt much more manageable.
Contact Our West Palm Beach Bankruptcy Attorneys Today
Whether you have questions about debt relief and bankruptcy, or you are ready to get started on a bankruptcy filing, it is important to talk with an experienced West Palm Beach bankruptcy lawyer at Kelley, Fulton, Kaplan & Eller. An advocate at our firm can talk with you today to learn more about your circumstances and to provide you with more information about options for bankruptcy in South Florida. Contact us today to learn more about how we can assist you.
Sources:
consumerfinance.gov/ask-cfpb/what-is-a-debt-relief-program-and-how-do-i-know-if-i-should-use-one-en-1457/
nerdwallet.com/article/finance/find-debt-relief
law.cornell.edu/uscode/text/11
