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Is It Worse To Have Debt Or To File Bankruptcy

Is It Worse To Have Debt Or To File Bankruptcy

Struggling With Debt Or Filing For Bankruptcy

Bankruptcy is still a disturbing word to many people, but it can be a lifesaver. It's easy to get into serious debt today through no fault of your own. Medical emergencies can run up enormous bills. Credit card finance charges can expand a small purchase into one costing hundreds of dollars. If you are laid off at work, it may be some time before you find employment. Even a few missed payments cause late fees to pile up. Payment arrangements don't always stop the harassing phone calls and threatening letters.

This calls for action. By filing for bankruptcy, you can free yourself of the stressful burden of debt and make a new start.

How Does Bankruptcy Work - What Can I Expect

Filing bankruptcy involves a lot of paperwork and can become time-consuming and complex. A bankruptcy attorney can explain the basics and help you decide if filing bankruptcy is the right action for you to take. If you decide to declare bankruptcy, the attorney will work with you to prepare and file court documents.

The most common type of bankruptcy for individuals is Chapter 7 or liquidation. Your assets are examined to determine what portion of them can be sold by a court-appointed bankruptcy trustee. The money raised is used to cover your debts. Many items of personal property are exempt from liquidation. These exemptions vary by state but generally include your home, car, personally significant heirlooms, pets, and work tools.

Bankruptcy is covered by federal law, with provisions in place to protect both you and your creditors. A bankruptcy attorney will go over these laws with you in detail.

Free Of Debt - After Bankruptcy

As soon as you file bankruptcy with the court, the phone calls and letters from creditors will stop. Once your assets are liquidated and your debts paid, you'll be able to go on with your life. A bankruptcy stays on your credit record for seven to ten years. This is a chance for you to change your spending habits and learn to live within your means.