It Sounds Like a Bad Word, but It’s Really Here to Help
There’s no doubt that we live in an age of great financial strain. I don’t mean that on a national level, necessarily, although arguments can certainly be made for its truth. Rather, I mean that in a personal sense. It’s easy, today, to be pulled in a multitude of different financial directions; therefore, it’s easy to find oneself in a stressed financial situation. Despite how common it is, grappling with financial stress can be incredibly difficult, and it can take a toll on one’s personal life in a multitude of ways. Getting away from that financial stress can be liberating in a way few things are.
For many, the solution to financial stress lies in one simple, but difficult to utter, word: bankruptcy. But if there’s any financial word that has a bad connotation, it’s definitely bankruptcy. In fact, there are many people who do all they can to avoid bankruptcy (there are other people who declare bankruptcy and then run for President of the United States; it’s safe to say reactions run the gamut). But sometimes, bankruptcy provides a valid choice for some people who have found themselves in dire financial straits. That begs the question: when should I declare bankruptcy?
Taking Stock of Your Financial Situation
Before deciding whether or not to declare bankruptcy, you should certainly take stock of your current financial situation. Your creditors, after all, will likely want to know what you have in terms of assets and what you have in terms of debts. If, for example, you’re living quite comfortably (with a high income to debt ratio), Bankruptcy may not be the way to go. But if your debt far outstrips your income, then Bankruptcy becomes a much more valid route to take. It’s important that you know this information, because you will certainly be asked about it.
Knowing What Bankruptcy Is… And How Long it Lasts
The second part of knowing whether bankruptcy is the right move for you is doing some research. It’s important to know just what you’re signing up for and how long you’ll be paying for that decision. This is also the part where having an excellent bankruptcy attorney can come in handy. Because there are actually several different forms of Bankruptcy you can file (especially if you’re a corporation or own a business or have a medical condition and so on), it’s useful to know specifically what type of bankruptcy to file, and attorneys can provide invaluable insight in that regard.
Defined very generally, bankruptcy is a way of admitting you can’t pay the debts you’ve accrued. When you admit this, your creditors agree that they would rather get something than nothing, so everybody gets together and agrees on what you are able to pay. It’s a way of salvaging a situation that isn’t necessarily the best for all involved. There is, however, a price for pursuing this option. Depending on which type of bankruptcy you file, your settlement will show up on your credit report for anywhere between seven and ten years (depending on which type of bankruptcy you filed).
Having a bankruptcy on your credit report can make it virtually impossible to secure a loan or financing. That may seem like a small trade off today, but it’s difficult to foresee where your life would be in ten years.
Getting Help With Bankruptcy is Huge
There are many people out there who like to go it alone; you all know one of those lone wolves. That’s not necessarily a bad thing. However, it’s important to note that bankruptcy is complicated. It can be hard to find help, especially when you consider the social stigma associated with something like bankruptcy. But people file bankruptcy for all kinds of reasons—many of them beyond anyone’s control. You should not feel any type of stigma when you file for bankruptcy, especially if at that point it’s the smartest thing for you to do.
Some Type of Debt is Not Covered by Bankruptcy
Finally, it’s important to note that there are some types of debts that are not covered by bankruptcy. The most common among these is student loan debt. Most types of student loan debt will stick with you through bankruptcy. That’s somewhat unfortunate, but it’s definitely something to consider.
It’s Important to Get Help as Soon as Possible
If you feel trapped by the kind of debt you’re in, it’s important that you get help as soon as possible; find out how bankruptcy can help you; or, more importantly, how to get the process started. Finding that momentum is sometimes the hardest part: but remember, bankruptcy is there for you to use it. So use it.
Legal Musings 