Some of the most responsible people find themselves in financial trouble. At times these issues becomes so bad that there is simply no way they can get out from under them. One solution for individuals that find themselves in such a situation is to file bankruptcy.
Filing for bankruptcy is known to take a toll on individuals both emotionally and financially. It takes years after filing for bankruptcy for you to rebuild your credit profile. It is estimated that in 2017 there were upwards of 750,000 bankruptcy filings, not including businesses. Bankruptcy is a legal action that individuals or businesses can take in order to dismiss a portion or all of an accumulated debt. It is important to note that this is not done without meeting certain criteria and without consequence. There are advantages and disadvantages to the bankruptcy process. It is important to understand bankruptcy, how it can impact your financial future, and just how you can survive and thrive after.
Bankruptcy is a legal process that is used to eliminate or lessen the debts that individuals and businesses are responsible for paying. Due to the complexity of the process it is important that a bankruptcy attorney is hired. Each bankruptcy is unique and will be evaluated as such. Courts need to determine what the financial burden is and the ability the individual or business has to pay it. Hiring a bankruptcy lawyer is crucial because of the ramifications it has on your credit, getting new loans, and new credit.
Bankruptcy is not always a good idea however, for many it can be the only way to achieve financial stability. Bankruptcy can relieve you from a portion of or all of your debt. If only a partial portion of your debt is relieved the bankruptcy court will assign a repayment budget for the remaining debt. Once you have started the bankruptcy proceedings foreclosure on your home, repossession of your car, wage garnishments, utility shut offs, and so forth will cease. Creditors and collection agencies will no longer be allowed to call you without a fine.
Each bankruptcy case is unique and requires a one on one evaluation. Some debts are commonly reduced or dismissed such as credit cards, medical bills, past utility bills, and even sometimes rent. Others, however, are rarely dismissed through bankruptcy including child support, alimony, taxes, and student loans. If you are no longer required to pay on your car there is a high probability that it will be repossessed.
Once the bankruptcy process has been concluded it is time to get back on the saddle. Let’s face it, we all need credit at one point or another. Using credit and credit history is how many people buy homes, cars, and larger purchases. Bankruptcy will impact your credit and have a negative effect on your credit report. You will not be able to get a loan or credit for a while after bankruptcy. When you do start to accumulate credit again you should expect to pay higher interest rates, increased security deposits, and larger down payments. When accumulating new credit after bankruptcy it is important to stay within your budget, pay your bills on times, and avoid accumulating debt.
Filing for bankruptcy is not a decision that should be made without a lot of thought. If you think you have no way out of your debt it is best to meet with a bankruptcy attorney for a free consultation to determine the pros and cons of this action in regards to your unique situation.
Bohikian Law Group specializes in bankruptcy services including chapter 7 and 13 bankruptcy. More information can be found at https://bohikianlaw.com.