When Should You File Bankruptcy?

Only file bankruptcy if you’ve considered other bankruptcy alternatives and found out that the repayment alternatives are not possible. In this case declaring bankruptcy is unavoidable.

Do you think that a person has become poor when they are bankrupt? Or, do you have a pre-conceived notion that bankruptcy is caused by irresponsibility and laziness. In the real world, it can be one of the most responsible actions that a person can choose to take. It’s a tough decision for most people to make, but it often is the best one for certain situations.

What Happens When You File Bankruptcy

When you start declaring that you are bankrupt, what you are saying to your creditors is that you cannot possibly ever repay all of your debt. You will have to declare bankruptcy through a lawyer. If it so happens that your situation is a valid one, you are then freed of your debt. All the companies that you owe money now have no right to ask for it.

This may sound awesome at first; however, it does have its drawbacks as well.

Having something like a bankruptcy appears on your credit report for the next six to 10 years will not be even close to beneficial to you. Because of it, you will have trouble getting credit cards, loans or making big purchases even though ironically, these may the very things that cause you to declare bankruptcy in the first place.

If you are able to prove that you are making some real strides with your financial situation, you could find it less difficult to get financing. However, it’s a good way to take financial responsibility of your own life. Not to mention, you will feel a great big burden being lifted off your shoulders.

Get Legal Advice When You File Bankruptcy

Since filing for bankruptcy is a complex process that requires an understanding of the new bankruptcy laws, you may need the advice of a legal representative to make sure you’re in the right path. If you are searching for an attorney to give you counsel, you will want to find one who is specifically qualified to help you in bankruptcy filing.

It is always best to consult a lawyer or debt counselor before you really decide to file for bankruptcy. They can consult you the right reasons and timing for bankruptcy since credit card companies and other creditors where you owe money really do have the right to say no to your bankruptcy claim.

There are certain situations when they are very likely to refuse your bankruptcy claim. For example, if you just went on a vacation, made a big purchase, or spent money after consulting with a lawyer, you will look suspicious in their eyes and will likely be denied. In this case, a bankruptcy attorney can help you in pre-filing preparation before you file bankruptcy.

When Should You File Bankruptcy? was last modified: April 13th, 2014 by Paul Sarwana