4 Bankruptcy Facts To Consider

Bankruptcy Lawyer

It may come as a relief to hear that you won’t lose everything by filing for bankruptcy, as this resource can be helpful in rebuilding your financial future. By filing for Chapter 13, Chapter 7, or another of the six bankruptcy chapters, you can get yourself on a path to a more secure financial footing. But the decision to file for bankruptcy should not be taken lightly either, as there are benefits and some drawbacks. But in the right situation, this tool can ultimately change a person’s life for the better. Here are four bankruptcy facts to consider.

#1 You Won’t Lose It All

You may imagine that bankruptcy means having to give up everything you have, such as your car, house, or other assets. But in some instances, you may actually be able to keep most or all of your possessions. Most Chapter 7 cases are no-asset situations, meaning that the debtor doesn’t have to give up any tangible property. The assets that are exempt vary by state. Some bankruptcy chapters allow you to keep your belongings (which would otherwise be used to liquidate and pay off creditors), and sets you up with a debt repayment plan instead.

#2 Not All Your Debts Go Away

Despite what people may think at first, filing for bankruptcy does not actually eradicate all of your debts. Chapter 13 and Chapter 7 can provide debtors with relief from most debts, but there are specific exceptions. Generally, as a bankruptcy lawyer can attest, bankruptcy does not elude you from debts that you are personally responsible for, like taxes or child support payments.

#3 Maybe You Just Can’t Pay Off Debts

Filing for bankruptcy is a serious financial choice where the pros and cons must be considered. For some debtors, they simply just cannot pay off their debts. Filing for bankruptcy may be the best option available. Bankruptcy is not a solution for every financial problem, but it can help people achieve relief from money stress that is unlikely to go away any time soon. If a debtor is frequently at a loss each month and is earning less than what they owe, bankruptcy may be a realistic resource.

#4 Filing For Bankruptcy Is Not Failure

People have this view on bankruptcy as if they are admitting to failure, or that something is wrong with them. Regardless of the reason for why you want to pursue debt relief, consider bankruptcy as a tool to be used to take control of your finances, particularly when they feel out of control. There are many people out there who could benefit from bankruptcy, but they are wrapped up in judgements about themselves and from others that prevents them from doing so. Keep in mind though, there is no way that your relatives, friends, or coworkers could find out about your bankruptcy status, unless you tell them. So filing for bankruptcy or not is a personal decision that should not be tainted by judgments and outside opinions.