Bankruptcy is a decision that should not be taken lightly. It can have major impacts on your finances, credit score, and future. That’s why it’s important to take the time to understand bankruptcy laws before deciding whether or not bankruptcy is an appropriate option for you. In this blog post we’ll walk through some of the most common bankruptcy options and offer advice on how to decide if filing for bankruptcy is right for you.
Bankruptcy, also called bankruptcy law or bankruptcy proceedings, refers to a legal process in which an individual (or company) can be declared by the court to have no obligation for some or all of their debts. The person who has been declared bankrupt may ask the courts for help with paying back debt obligations and get a fresh start without having these burdens hanging over them. There are two main types: liquidation bankruptcy and reorganization bankruptcy. In either case, filing for bankruptcy will mean that you can’t apply for credit until seven years after your discharge date.
When considering whether or not it’s appropriate to file bankruptcy as an option, the bankruptcy lawyer will consider factors such as disposable income, secured and unsecured debts, and bankruptcy alternatives.
There are two main types of bankruptcy: liquidation bankruptcy or reorganization bankruptcy. Reorganizing your debt through a Chapter 13 plan may be an appropriate strategy for you if you have enough assets to pay back creditors over time in affordable installments. Some people also choose not to file at all – this can work well depending on how much money they make and how often their wages get garnished.
Once you’ve decided that it’s necessary to pursue legal action against debtors who can’t pay their debts, bankruptcy is an appropriate option. To have a better understanding of bankruptcy and what it entails, talk with your bankruptcy attorney today.
Bankruptcy may not be the right option for everyone – especially those who are just beginning their careers or don’t yet own property. Bankruptcy will impact your credit score (or report) in the future; make you ineligible for certain government programs such as Social Security disability benefits, Medicaid/Medicare; limit eligibility for many jobs that require background checks; impede military enlistment if discharged within four years of filing bankruptcy.