When to File Bankruptcy

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How Do I Know When to File Bankruptcy?

For many people, filing for consumer bankruptcy can provide a way to get a fresh start and obtain some relief from debts and other financial burdens. This is because filing for bankruptcy can often wipe a person’s debt out to a certain extent, thus relieving them from having to repay some debts and loans.

Most people file bankruptcy as a last option to help resolve their financial situation. When considering bankruptcy, it helps to keep these ideas in mind:

How Do I Know If Bankruptcy Will Help Me?

In general, it is a good idea to evaluate all the options you have prior to filing for bankruptcy. A bankruptcy discharge does not eliminate certain debts and prior obligations, so understand if filing for bankruptcy would be in your best interests. Make sure that the debt that you are concerned with would be discharged in bankruptcy. In addition, many creditors are willing to work with debtors to settle their debts without going through the bankruptcy process.

Also consider whether you can file for Chapter 7 or whether you must file for Chapter 13 bankruptcy. The factors that you should consider include: 

What Are the Advantages of Filing for Bankruptcy?

There are many advantages to filing bankruptcy, such as:

 In general, bankruptcy may actually provide somewhat of a "breather", financially speaking. This can help a person get back on their feet and begin the process of rebuilding their finances.

Are There Any Drawbacks to Filing Bankruptcy?

Although bankruptcy can discharge a debt of an individual and make their financial situation a little bit more manageable, there are also some drawbacks to filing for bankruptcy including:

Should I Hire a Lawyer for Help with Bankruptcy?

Bankruptcy laws can often be quite complex, and filing for bankruptcy can be a complicated process. You may need to hire a lawyer if you’re considering filing for bankruptcy. Your bankruptcy attorney can advise you one which options are best for you, and can also guide you through the application process. In the event that a legal dispute arises, a qualified lawyer can help defend your interests in a court of law.

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Last Modified: 08-27-2015 10:21 AM PDT

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