The decision to file for bankruptcy is not an easy one of r anyone to make. There are many things that people have to consider before they file.
Those that choose to file for bankruptcy choose to do it because they are overwhelmed with debt don’t have the means to pay it off. Not everyone that has to file for bankruptcy is irresponsible. Millions of people have had to file for bankruptcy because of situations beyond their control. Some have gotten sick and were unable to pay their bills because they were without an income for an extended period of time. There are others that have experienced job loss or wage reduction that wouldn’t accommodate their current way of life and bills. Before choosing to file for bankruptcy protection, there are some hard facts that should be considered.
The Cold and Unwavering Reality
Filing for bankruptcy can either help someone get on the right track in paying their bill or it will eliminate their debts completely. It is a relief for those that have done it and has given them the opportunity to start over financially. Before filing, people should know some of the long lasting effects of bankruptcy. An informed decision is always the best decision.
5 Years or More- Once a bankruptcy has been filed, it can stay on a person’s credit report for 5 years or longer. For millions of people, this is something that not acceptable. Having a bankruptcy listed on a credit report can stop people from purchasing a new home, car, applying for a loan in many circumstances and much more. Not all potential creditors understand nor do they want to work with someone with bankruptcy in their files.
Business can be Jeopardized- Those that own a small business can put their business at risk. There is a very thin line between what is owned by someone and what their business owns. This is something that is especially true for those that own and operate a home based business. The assets of the business can be seen as assets of the individual filing for bankruptcy protection.
Not all Debts are Protected- There are millions of people that want to file bankruptcy because they have too much student loan debt or they have tax liens against their property. These are 2 types of debts that are not allowed in bankruptcy proceedings. While medical bills and credit card bills are among the most popular bills listed in bankruptcy proceedings, not all debts will be accepted. Those debts that are not accepted will have to be repaid and arrangements will have to be made with those parties.
Hiding Assets Can Mean Jail Time- Not everyone that files bankruptcy is as innocent as they say they are. Many have attempted to keep some of their assets from being considered in the bankruptcy by signing it over to someone else until their bankruptcy is filed and accepted. This is not recommended and it can result in fraud charges. Those that are found guilty can be given jail time and/or a fine for their choices.
Those that need to file for bankruptcy should speak with an attorney that is an expert in bankruptcy laws. If it’s determined that bankruptcy is the best option, people shouldn’t hesitate to file. Time is of the essence and filing sooner instead of later will bring more relief than stress.
While filing for bankruptcy isn’t always the ideal choice, it’s a choice that has given millions of people another chance at financial freedom.