What are the Advantages to Filing for Bankruptcy?
Despite its disadvantages, in many cases, filing for bankruptcy is the correct course of action. The advantages of filing for bankruptcy are:
- Filing for bankruptcy will trigger the automatic stay, preventing creditors from taking action to collect their debts, prevent creditors from repossessing property such as cars, including calling you, suing you, or sending you letters. This also puts a stop to many evictions, foreclosures, wage garnishments and utility shutoffs.
- You may be able to discharge your obligation to repay any of your dischargeable debts.
- By using the bankruptcy exemptions, many debtors can go through the bankruptcy process without losing any of their property.
- While a bankruptcy filing will remain on your record for 7-10 years, because many debts can be discharged in bankruptcy, many debtors begin improving their credit rating after filing for bankruptcy.
- Without credit cards, you can learn to live within your income and prevent future financial catastrophes.
- Debtors declaring personal bankruptcy are required to take credit counseling. Therefore, you’ll have education to guide you as you rebuild your credit and learn new financial habits.
Can Your Request for Bankruptcy Be Denied?
Petitions for personal bankruptcies are not denied often, but it is a possibility. One potential reason for denying a debtor’s bankruptcy is dishonesty. If the debtor tried to hide financial assets and records, and this is discovered, their bankruptcy may be denied. The notion behind bankruptcy is total honesty about one’s financial status, and the necessity of creating a clean slate, financially.
Bankruptcies may also be denied for technical reasons. For instance, if paperwork work is not timely or is otherwise filed incorrectly, or other conditions for filing a bankruptcy are not met, the bankruptcy petition may be thrown out.
It is also possible for the court to convert the debtor’s type, or “Chapter,” or bankruptcy, to one that is deemed more suitable to the debtor’s circumstances.
It is best to be completely honest about your financial situation, and handle (or have your lawyer) handle all technical aspects of the proceedings correctly in order to make a bankruptcy petition worth your while.
Should You Contact a Bankruptcy Lawyer?
Whether bankruptcy is the right solution to your financial problems will depend on your situation, the type of debts you have, and how much property you need to protect. If you are contemplating bankruptcy, you should consider discussing your options with an experienced bankruptcy attorney.
While it is possible to handle a bankruptcy pro se (representing yourself), the majority of people who file bankruptcy in the United States do so with the assistance of an attorney. There are many different types of bankruptcies, and rules that go along with each one, and a lawyer experienced in bankruptcy law can be very valuable.
A bankruptcy attorney can help you decide whether or not to file for bankruptcy, and what type of bankruptcy you should file. If you decide to file, an attorney can help ensure that your property is protected, all of your dischargeable debts are discharged, and your creditors do not violate your rights, so that when you complete your bankruptcy, you will be on the right road to financial recovery.