Before Filing Bankruptcy, Get an Overview of the Pros and Cons


People who are not knowledgeable about the bankruptcy law, seem to jump into conclusions and feel redemption. They are thinking that because they knew about their neighbors discharge of debts because they filed bankruptcy, they will also have the same fate. This is a very wrong notion about the bankruptcy process. While it is true that some debts are discharged and some people are qualified not pay any more of their debts, as the courts have ruled on it - this does not apply to all people filing for bankruptcy.

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There are rules to be followed and careful scrutiny of your financial records will be studied by a team of lawyers in a bankruptcy court before they can make that judgment for you. If you are in a tight situation where bankruptcy is applicable, look into it first. So before filing bankrupt, get an overview of the pros and cons first. If you decide to do it yourself, it is possible. But, if you hire an attorney who is an expert in the field, you will get everything in your favor.

The Benefits of Filing for Bankruptcy

Bankruptcy is a program by the federal law for individuals who can no longer pay their debts and seek relief from it. A person can indeed gain from this because most debts will be discharged meaning a person who has filed bankruptcy cannot be liable to pay for unsecured debts. Collectors cannot anymore compel them to pay up. Moreover, if a person who has filed is continually pressed for payment, the creditors can be sued and the debtor can ask for monetary remuneration.

If you don't have anything in your name, this is a blessing in disguise. You don't have any property for the creditors to have an interest on you. So there is no way but for them to wait for the decision of the court on how you will be able to pay them.

In Chapter 13, you can seek relief from foreclosure of your home. You can still retain ownership of it and the payments you make for the mortgage can either be lessened or a payment scheme will be made for your advantage. A debtor qualified for a Chapter 13 will pay depending upon capacity and the debts of that person will be divided into 12 equals payments per year for as long as 6 years.

If you have a few assets under you, then, these assets can be made to pay for your debts. This is a nice alternative as long as you don't have to look for cash to pay your creditors. This is what a Chapter 7 does for you.

If you hire a lawyer to help you, he or she can tell you all about the bankruptcy code. The chance of you making the right decision is higher if you have an attorney with you. Before filing bankrupt, get an overview of the pros and cons - your lawyer is responsible to give you that information. From here on, you can start your life without debt collectors to pester you.

The Other Side of Bankruptcy Filing

This is the real deal. Filing for bankruptcy is not something you can think about getting into hastily. Why? Because there are always consequences to your wrong actions and here, wrong action is being in a state of losing control over your financial state. You will have a record of being a person who has declared bankruptcy and that can affect your credit standing. This reputation will stay and you will find it very gruesome to obtain a loan or be approved for credit in the future.

Other than that, if the courts decide to take your property from you, can you handle that? How about your family? This is a major lifestyle change and without your familiar assets to give you comfort, that can be a very difficult period in your life.

So, think about how you want to proceed. To be sure, consult an attorney to give you a better option. Always remember that what's important is to deal with your problems now before it is too late.


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