Is Bankruptcy the Appropriate Choice for You?
Current economic circumstances are causing a lot of individuals who have never before considered filing bankruptcy to now consider it as a workable solution to their financial troubles. The problem is that not everyone can be served by filing bankruptcy. So, if you’re one of those people who has never, until lately, given thought to filing bankruptcy, you need to know whether bankruptcy will assist you or not.
Should You Even Be Thinking Of Filing Bankruptcy?
As odd as it sounds, there’s no general-purpose test you can take to find out whether bankruptcy is proper for you. You don’t need a specific level of debt. You don’t need to earn less than a particular amount of money. And, you don’t even need to be in arrears in payments to your creditors.
Bankruptcy isn’t a decision you make by marking off boxes on a flow chart. Bankruptcy is a individual decision. But, it’s a individual decision that’s founded on certain factors in your life. They are some of the things you need to consider before deciding one way or the other about bankruptcy.
1. Are you in financial distress? You may be in financial distress if you’re having difficulty paying the minimum payments on your credit cards. And, if you’re barely able to keep necessities like food, clothing and shelter you’re likely in financial trouble.
2. Do you live paycheck to paycheck? If you had even a small health problem, would it place you in a financial crisis?
3. Are you judgment proof? Put differently, do you have no assets that can be seized and sold to pay off your obligations? You may not need to file bankruptcy if you’re judgment proof. Then again, judgments do stay around for a while. Each state’s judgment laws vary on exactly how long a judgment can hang around. But, what you need to consider is that your present-day bad situation may, and likely will, get better in the future. If it does, those judgments that were of no interest during your financial trouble will concern you because you could be looking at the confiscation of your future assets. Most lawyers will give you a free bankruptcy consultation. You should use it to discuss this particular issue.
4. Are creditors and collection agencies harrassing you? Bankruptcy is one alternative to stop that harassment. But, you can also stop it with a letter writing campaign under the federal Fair Debt Collection Practices Act and assorted state law fair debt collection laws. But, bankruptcy is in all probability the best alternative if you’re getting harrassed and you’re in financial distress (see #1).
5. Are you facing foreclosure? You’ll be able to stop a foreclosure by filing a Chapter 13 bankruptcy. Chapter 13 permits you to restructure your debts and pay your mortgage arrearage over time.
Will Bankruptcy Help You?
Bankruptcy won’t give you more income. So, if you don’t earn enough money to support your life style, bankruptcy isn’t your solution. You either need to lower your expenses or increase your income. You may even need to do both. But, you don’t need to file personal bankruptcy.
Bankruptcy also won’t help if your big debts are non-dischargeable debts. Bankruptcy law defines those debts that are dischargeable and those that are not. The following is a brief listing of such non-dischargeable debts in a Chapter 7 Bankruptcy under present-day bankruptcy laws.
* Recent taxes and government penalties
* Child support
* Criminal fines or court ordered restitution
* Personal injury awards where the debtor was inebriated at the time of the incident
* Debts that aren’t listed in the bankruptcy filing schedule
* Student loans (there are exceptions but it’s virtually impossible to meet the requirements for them. So, it’s best to regard student loans as non-dischargeable)
* Debts that were part of a pre-existing bankruptcy case but weren’t discharged
Concluding Considerations for Personal Bankruptcy
Determining whether to file bankruptcy isn’t an simple decision. But, it’s a decision you’ll be able to make if you adopt a logical and balanced approach to it. As part of your consideration, you’ll need to weigh your emotions, your background, your religious beliefs and your values. So, consider the following:
1. Do your own research. Learn everything you can about bankruptcy. A wonderful resource for training yourself on bankruptcy law is the book The New Banktruptcy: Will It Work for You?
2. Keep your future in mind. Consider of how you’ll feel when the case is concluded and you’re out from under a mountain of debt. How will you feel about yourself in 6 months or a year? Will you be pleased with your choice to either file bankruptcy or not file bankruptcy?
3. Find the right bankruptcy attorney for you. A tremendous spot to find bankruptcy lawyers in your area is Legal Match. Nearly all bankruptcy attorneys will give you a free bankruptcy consultation. Use that free consultation to question the lawyer. But, when you start questioning bankruptcy attorneys, don’t base your ultimate hiring decision solely on fee. It will be enticing to employ the most low-priced. After all, you’re in a financial crisis so the more inexpensive the better, right? That’s not always the case. Question the lawyer first. Be sure you’re a good match with that attorney. Your bankruptcy lawyer will be working for you so you need to be comfortable with the whole approach to your case. You need to feel good about the fundamental interactions you have with the lawyer and staff. You want a bankruptcy lawyer who will help you through this crisis in a positive manner. You don’t want to feel judgment or dislike from either the lawyer or the staff.
4. Filing bankruptcy is a moral decision. Don’t kid yourself into thinking it’s not. But, you do have to make the decision that’s best for you and your household. So ask yourself: “Is it more honorable to fight a losing financial struggle that puts your family’s future at risk in an attempt to pay back old debt?” Or, is it more respectable to acknowledge you did your best, you couldn’t make it work and you need a fresh start that will permit you to devote your personal time and effort into activities that will more than positively affect your family’s future?”
Only you can answer that question. Take your time. Make the proper decision for you and your household. Once you’ve come to that decision, have faith in your ability to make the proper choice. Then, move ahead knowing that your financial troubles will presently be over.
Leave a Comment
If you would like to make a comment, please fill out the form below.
Recent Comments