Personal bankruptcy is the process of legally declaring an individual’s inability to pay their debts. In many cases, bankruptcy may not be the only option available to you to deal with your financial difficulties. Consulting an experienced attorney can help you understand your rights and the options available to you. However, if it is the only option available, it is important to keep a positive approach towards it. Despite all the conventional negativism associated with the concept of bankruptcy, it is important to know that there are several positive aspects involved in it:
- Despite the fact that bankruptcy can severely affect your credit history, it is also true that once the entire process is complete, all of your credit history is erased, giving you the opportunity to start over.
- As soon as the court accepts your personal bankruptcy filing and your bankruptcy status is confirmed, creditors are legally required to stop calling you directly. Getting instant relief from the harassment caused by lenders is probably one of the most positive parts of filing for bankruptcy.
- Nothing can stop you from filing for personal bankruptcy more than once if you want and need to. However, in some forms of bankruptcy, there is a need to maintain a particular period of time between two filings. For example, while Chapter 13 bankruptcy can be filed as often as needed, it is necessary to maintain an eight-year period between successive Chapter 7 bankruptcy filings.
- It is not necessarily true that you would lose all of your assets if you file for personal bankruptcy. Instead, there are provisions in the bankruptcy laws that allow you to retain certain valuable assets and also take advantage of easy payment plans according to your convenience and requirements.
In case you decide to file for personal bankruptcy, it is important to choose between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Again, a knowledgeable attorney can help immensely in making the right decision regarding your financial status, conveniences and needs.
Chapter 7 bankruptcy is ideal for people who have non-exempt assets that can be liquidated by the court to pay off the amount owed. However, it has been seen that only 5% of people who file for Chapter 7 bankruptcy own non-exempt assets.
Chapter 13 bankruptcy, on the other hand, is suitable for people who, despite their financial crisis, have a fixed annual income. These people can get into an easy payment plan through negotiation with lenders, which can also often reduce the amount of debt owed. The debtors can then repay the loan amount over a fixed period of time which really helps them immensely.
An experienced and knowledgeable attorney is your best source for getting enough information about personal bankruptcy, its pros and cons, and the right option for you. It is extremely important to fully understand your legal rights, responsibilities, and options before deciding to file bankruptcy.
