Bankruptcy is a big step. Hopefully, filing bankruptcy is a once in a lifetime event. Making sure filing bankruptcy is right for you is important. Here are 7 things to consider before filing bankruptcy.
1. Bankruptcy will not ruin your credit for life. Most people facing bankruptcy already have pretty bad credit. Normally, the credit rating does not go down much (if any); more importantly, in bankruptcy, you discharge debt, which puts you back on track to sound financial dealings, which will eventually lead to a better credit rating.
2. Bankruptcy law is very complicated. You are allowed to file your own case, but it is rarely advisable. Hiring an attorney who regularly practices bankruptcy law will likely save you money in the long run; and save you a lot of “headaches”.
3. Most people do not lose their personal property when they file bankruptcy. Depending on how much “stuff” you have, and what state you live in, you may or may not be forced to surrender any property. Most people don’t, but you need to consult with a knowledgeable bankruptcy attorney in your area about your specific situation.
4. Bankruptcy, in most cases, temporarily stops garnishments, repossessions and foreclosures. This is great when trying to save your home or car; or when you are having your paycheck garnished.
5. Chapter 7 Bankruptcy “wipes out” most debts, giving the consumer a fresh start. Chapter 13 Debtor’s Court gives the consumer an opportunity to catch up on debt payments and pay back debts, while under the protection of the bankruptcy court.
6. Bankruptcy may be the best, and only, option. No one wants to file bankruptcy. By the time most people actually get up the nerve to call a bankruptcy lawyer, they have already exhausted all their other options. For many people in dire financial situations, bankruptcy is the best option; sometimes the only option.
7. Watch out for debt consolidation scams. People in dire financial situations are desperate, and often susceptible to predatory scams. Be careful. Do your homework. If it sounds too good to be true, it probably is.
Bankruptcy is the right decision for some people. Before you decide it’s right for you, do your homework. Talk to a bankruptcy lawyer. Understand your situation and options; then you can make a sound decision about filing bankruptcy.