Current economic circumstances are making a lot of individuals who have never before thought about filing bankruptcy to now view it as a workable answer to their financial troubles. The problem is that not everyone can be helped 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 help you or not.
Should You Even Be Thinking About Filing Bankruptcy?
As strange as it sounds, there's no standard test you can take to find out whether bankruptcy is appropriate for you. You don't need a particular level of debt. You don't need to earn less than a particular sum of money. And, you don't even need to be in arrears in payments to your creditors.
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Bankruptcy isn't a decision you make by marking off boxes on a flow chart. Bankruptcy is a personal decision. But, it's a personal decision that's founded on specific factors in your life. You need to consider the following factors in your life 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 trouble paying the minimum payments on your credit cards. And, if you're scarcely able to keep necessities like food, clothing and shelter you're probably in financial distress.
2. Do you live paycheck to paycheck? If you had even a small health issue, 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 liabilities? You may not need to file bankruptcy if you're judgment proof. Then again, judgments do stick around for a while. Each state's judgment rules vary on exactly how long a judgment can hang around. But, what you need to consider is that your current bad situation may, and in all likelihood will, get better in the future. If it does, those judgments that were of no concern during your financial crisis will interest you because you could face 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 agents harassing you? Bankruptcy is one option to halt that harassment. But, you can also halt it with a letter writing campaign under the federal Fair Debt Collection Practices Act and associated state law fair debt collection laws. But, bankruptcy is in all probability the best choice if you're being harassed and you're in financial trouble (see #1).
5. Are you facing foreclosure? You'll be able to stop a foreclosure by filing a Chapter 13 bankruptcy. Chapter 13 allows 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 main debts are non-dischargeable debts. Bankruptcy law defines those debts that are dischargeable and those that are not. The following is a short list of several 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 drunk at the time of the incident
* Debts that aren't listed in the bankruptcy filing schedule
* Student loans (there are exceptions but it's nearly impossible to meet the prerequisites for them. So, it's advisable to view student loans as non-dischargeable)
* Debts that were part of a pre-existing bankruptcy case but weren't discharged
Final 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 take a logical and well-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. Read everything you can about bankruptcy.
2. Keep your future in mind. Consider of how you'll feel when the case is concluded and you're out from under a pile of debt. How will you feel about yourself in 6 months or a year? Will you be delighted with your choice to either file bankruptcy or not file bankruptcy?
3. Find the proper bankruptcy lawyer for you. Most bankruptcy attorneys will give you a free consultation. Use that free consultation to interview the lawyer. But, when you finally decide on an attorney, don't base your final hiring decision solely on price. It will be enticing to engage the most inexpensive. After all, you're in a financial crisis so the more low-priced 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 general approach to your case. You need to feel good about the interactions you have with the lawyer and staff. You want a bankruptcy lawyer who will help you through this crisis in a positive mode. 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 believing it's not. But, you do have to make the decision that's best for you and your family. So ask yourself: "Is it more respectable to continue a losing financial struggle that places your family's future at risk in an effort to pay back old debt?" Or, "is it more respectable to recognize you did your best, you couldn't make it work and you need a new start that will permit you to devote your personal time and effort to activities that will more positively affect your family's future?"
Only you can answer that question. Take your time. Make the right decision for you and your household. Once you've arrived at that decision, have faith in your ability to make the proper choice. Then, go forward knowing that your financial crisis will soon be over.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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