Filing Bankruptcy Should Not Necessarily be Your Last Option

Most people who are forced into having to file for bankruptcy protection do so because it is their last option. Many debt management gurus on the internet teach that filing for bankruptcy should be your last resort or option, but should it be?

This personal bankruptcy story was posted on the internet in November 2010 as a comment in a discussion on bankruptcy: “I tried for years to repay [my creditors], especially credit card companies, always the new plan. I would make some ground, then a truck would break etc.. no fun being in credit debt. I had my own business and worked at times 15-20 hrs a day… If you need to do it [file bankruptcy], have run out all your options, there is no shame in it. It’s as it was meant to be, a fresh start for those who need it. Good luck to all others. Filed in April, here we are November, 7 months later and no discharge or specific word yet. It is frustrating, but it is a last option.”

The debtor in this personal bankruptcy illustration testified there should really be no shame in the last option of filing for bankruptcy protection. Filing for bankruptcy is what he did as a last resort.

When an individual files for bankruptcy protection is really more of a personal choice, but sometimes that choice is made for you. There are two forms of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces bankruptcy proceedings onto a debtor. The greatest majority of bankruptcy proceedings are of the voluntary variety. Debtors being involuntarily filed on usually respond with a voluntary filing of their own, so in effect, the choice is not really the debtor’s because the debtor is forced to file.

To avoid some of the stress associated with going bankrupt, the choice might be made sooner in some cases. In any regards, there is a relatively easy way to determine whether you should file for bankruptcy or not.

Becoming bankrupt is a black and white experience much more than it is a gray one. As a general rule of thumb, you are completely financially bankrupt if your current sustainable income will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans while paying on them for five years. Five years is the maximum legal number of years a United States Bankruptcy Court allows an individual to work their way out of bankruptcy protection.

If you find yourself in the position of being or going completely bankrupt, there should be plenty of motivation for you to file for bankruptcy protection. By this time, many of your creditors will most likely be pursuing you and invoking debt collection procedures, law suits, garnishment, attachments, evictions, foreclosures, and the like. Also at this point, you may have already tried debt management companies and consolidation of your loans to no avail. Since the debts will not go away by themselves and the pressure from your creditors are most likely to increase, the events should provide plenty of motivation for you to file.

The moment you file a bankruptcy, a judge will order all collecting actions to cease, an important feature called the automatic stay. The automatic stay, applicable to all types of bankruptcy filings, means that the mere request for bankruptcy protection automatically stops and brings to a cessation certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment.

If you have found yourself in a situation where you cannot reduce your debt load within a five year period, you may be a candidate for filing a bankruptcy, but choosing the appropriate bankruptcy to file can be a complicated and tricky process. Common sense indicates you might need a bankruptcy lawyer in order to help you understand how complex bankruptcy laws may apply in your particular situation.

If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan counties of Bergen or Passaic, New Jersey, contact us here today at .We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

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