Should You Consider Bankruptcy?
Debt can weigh heavily on an individual and family. If you owe one or more creditors a significant sum of money, you may be seeking ways to stop being terrified by creditors that you owe money too, but are unable to pay. One way to seek protection from the debts you owe is a bankruptcy filing. Bankruptcy entitles an individual, family or business to liquidate its assets or to reorganize their assets or business in order to pay off debtors or seek the protection of the law from debtors. While bankruptcy is usually the final solution for those that are deep in debt, in many cases it can give a person, family or business the ability to rebuild and get a fresh start.
When deciding whether to go bankruptcy, look at the type of debt you owe and the amount of debt that you owe. Many types of debt can not be cleared by a bankruptcy. This includes some types of student loans, state or federal taxes that you owe and certain types of legal penalties such as a fine given for drunk driving. Other types of debt may or may not be cleared when an entity declares bankruptcy.
You should also look at the amount of debt that you owe. For instance, if you owe 20K in credit card debt and make a decent salary, you may not want to go through all the trouble of bankruptcy just to clear 20K. It should be noted that bankruptcy stays on your credit report for more than 10 years and can stop you from receiving loans, new credit cards or receiving a good interest rate even if you do qualify.
Most people go bankruptcy in order to keep creditors from taking away their possessions such as a home or cars. In many cases, a bankruptcy can help one reorganize themselves in order to pay off debt without the interference of pushy collection agencies. It should be noted that if you are thinking about going bankrupt to protect your assets, some assets are protected from creditors such as an IRA or payments from social security or welfare. However, please check with a lawyer for your specific situation.
For those that are thinking about going bankrupt, there are plus and minuses, since each person’s situation is different, talk to a bankruptcy attorney to figure out if you can benefit from bankruptcy protection.
