Personal bankruptcy is the process of legally declaring an individual's inability to repay debts. In many cases, bankruptcy may not be the only option available to you to deal with your financial difficulties. Consulting an experienced lawyer can help you become aware of your rights and the options available. However, in the event that this is the only option available, it is important to maintain a positive approach towards it. Despite all the conventional negativisms associated with the concept of bankruptcy, it is important to know that it has several positive aspects:
- While bankruptcy can have a big impact on your credit report, it's also true that once the process is complete all of your credit history is erased giving you a chance to start over.
- As soon as your personal bankruptcy filing is accepted by the court and your bankruptcy status is confirmed, creditors are legally obligated to stop calling you directly. Getting instant relief from harassment caused by lenders is probably one of the most positive aspects of filing for bankruptcy.
- Nothing can stop you from declaring personal bankruptcy more than once if you want and need to. However, in some forms of bankruptcy it is necessary to maintain a particular period of time between two filings. For example, while Chapter 13 bankruptcy can be filed as often as needed, it is necessary to maintain an eight-year period between two successive Chapter 7 bankruptcy filings.
- It is not necessarily true that you would lose all of your assets if you declared personal bankruptcy. Instead, bankruptcy laws contain provisions that allow you to hold certain valuable assets and have easy repayment plans depending on your convenience and requirements.
In the event that you do decide to file for personal bankruptcy, it is important to make a choice between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Again, a knowledgeable lawyer can help you immensely in making the right choice in this regard. that concerns your financial situation, your amenities and your needs.
Chapter 7 bankruptcy is ideal for people with non-exempt assets that can be liquidated by the court in order to pay off the debt amount. However, we have seen that only 5% of people opting for Chapter 7 bankruptcy own non-exempt assets.
Chapter 13 bankruptcy, on the other hand, is suitable for people who, despite their financial crisis, have a fixed annual income. These people can get into an easy repayment plan through negotiations with lenders, which can often reduce the amount of debt owed. Debtors can then repay the loan amount over a fixed period of time, which helps them tremendously.
An experienced and knowledgeable lawyer is your best source for getting enough information about personal bankruptcy, its pros and cons, and the right option for you. It is extremely important to know your legal rights, responsibilities, and options in detail before you decide to file for bankruptcy.