Bankruptcy is a relief provided by the government for people who are struggling financially. If you file for bankruptcy, you will have some breathing room to restructure your debts and eliminate some of your liabilities through bankruptcy discharge.

The United States Bankruptcy Code provides the guidelines of the proceedings which are regulated by the bankruptcy courts. The guidelines are used to determine the fundamental procedures for filing a bankruptcy petition. Moreover, the different types of bankruptcy, filing qualifications and costs of filing are stated in the guidelines.

One of the things that you need to fill out in your bankruptcy petition is claim for exempted assets. Every state has its own rules for bankruptcy exemptions of property. Furthermore, there are different amounts of exemption depending on the type of property.

There are different types of bankruptcy named for their chapters in the U.S. Bankruptcy Code. The chapters have distinctive features and are designed for specific situations. There are chapters that allow for an eradication of almost all debts, while some provide an opportunity to reorganize and pay off debts. There are chapters that are designed for individuals, and there are some chapters that are appropriate for business entities that are struggling with debt. The most commonly used chapters of bankruptcy are Chapter 7, 9, 11 and 13.  

Most bankruptcy cases are filed voluntarily, and there are only very few involuntary cases.  A voluntary petition is where an individual or business entity chooses to file for bankruptcy. The bankruptcy law also allows creditors to file for involuntary bankruptcy petitions on behalf of their debtors, provided that the creditors satisfy the requirements set by the U.S. courts.  The main purpose of filing involuntary bankruptcy for the debtors is for the creditors to get back all or some of the money owed to them.  But involuntary petitions can only be filed under Chapter 7 and Chapter 11.

Meanwhile, a voluntary petition can be filed under any chapters of the Bankruptcy Code. Most voluntary cases are filed under Chapter 7 and Chapter 13.  The decision to file under either Chapter 7 or 13 depends on your financial situation and qualifications to file under a particular chapter. Another factor in determining which chapter to file for are the consequences you will face during and after the bankruptcy process.

You may file for voluntary bankruptcy if your income is not enough to pay for your basic needs and debts. It is important to carefully plan a voluntary petition because bankruptcy has some major consequences, which includes losing certain assets and significant decline of credit score.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, commonly called the new bankruptcy law, requires all individuals filing for bankruptcy to comply with a pre-bankruptcy counseling session with an organization approved by the U.S. Trustee Program.

It is always recommended to consult a San Antonio Bankruptcy Attorney before petitioning for your own bankruptcy so you can be certain that you have considered all of the alternate options and that you are making the right decision
  If you are unemployed, keeping up with bills payments can be hard. In fact, you may get to the point where you are behind on your mortgage payments and facing foreclosure. You are probably exploring your options to prevent a foreclosure the moment you lost your source of income. In this type of financial situation, the best option may be filing for bankruptcy.

Bankruptcy Options

If you want to stop foreclosure, you have a couple of bankruptcy options: Chapter 7 and Chapter 13. A successful Chapter 7 bankruptcy ends up in a discharge of almost all your and liabilities. When you have no income, Chapter 7 is a practical choice. A Chapter 13 bankruptcy requires a regular income because you have to repay your creditors within 3 or 5 years.

Protection from Creditors

Whether you file for Chapter 7 or Chapter 13, you and your assets are protected from your creditors through an automatic stay order. This court order is issued right after your filing. No creditor is permitted take action against you or your property without the court's authorization.

Homestead Exemption

Almost all states have a homestead exemption for their homeowners. This stops other creditors from attempting to try to get any home equity that you have. The amount of homestead exemption you can claim depends on the state where you live.

The Right of Redemption

In a Chapter 7 bankruptcy, you can make a redemption agreement with your lender. This arrangement will let you keep the house and make payments that you can afford. In a Chapter 13 bankruptcy, you can work out a deal with the creditor to update your mortgage payments through the repayment plan. Whether it is Chapter 7 or Chapter 13 bankruptcy, the foreclosure cases cease permanently when you enter a redemption agreement with a lender.

Hiring a Lawyer

Preventing a foreclosure through bankruptcy necessitates a basic knowledge of the bankruptcy procedures and law. For that reason, your interests are best protected by an experienced attorney.

Normally, lenders do not want to foreclose but in order to protect their interests, they have to. Once you realize that you are unlikely to pay your mortgage, one important thing you should do right away is contact your lender. You should not put it off. Do not be embarrassed or disregard letters from your lender for the reason that those responses are only going to worsen your situation. Filing bankruptcy can still delay or stop the foreclosure process provided that the house has not been sold yet. However, once it is sold, it is no longer yours and even filing bankruptcy cannot help you.

If you have applied for loan modification but it was rejected by your lender, a Chapter 7 or Chapter 13 filing may reduce or discharge your other payments and eliminate the arrearage to your mortgage. At this stage you might have more bargaining power. Seek advice from a good Bankruptcy Attorney San Antonio -- an hour or so with an expert is money spent well.