Why File for Bankruptcy Protection if You Do Not Have Any Assets to Protect?

There is really only two reasons you should file for bankruptcy protection- to eliminate debt in order to get a fresh financial start and to protect what assets you have from collectors who might legally take them. So, why file for bankruptcy protection if you do not have any assets to protect?

The obvious answer to the question is to eliminate debt in order to get a fresh financial start, but before going into detail of what filing under those circumstances may legally entail, it might be wise to understand what exactly filing for bankruptcy is. Filing for bankruptcy is a legal proceeding designed to protect both creditor and debtor and to allow the honest person or business to work their way out of a bad financial situation, or in some cases, to completely start fresh.

The key word in this definition is “honest.” Bankruptcy fraud is a crime. While difficult to generalize across legal entities, common criminal acts under bankruptcy laws typically involve concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and fee fixing. Falsifications on bankruptcy forms often constitute perjury. The new bankruptcy laws which are more generous to honest debtors were never intended to allow deadbeats and criminals to have a loop hole in order to beat their debts.

When you do not have any assets to protect, including an income that can be garnished, you are considered “collection proof.” For all practical purposes, if you can withstand the assault of harassing collection agencies for the statute of limitations, you will overcome most debt and will not need to file for bankruptcy.

Otherwise, if you still have income to garnish and want an honest way out of the stress associated with debt collection activities, you certainly might want to consider filing for bankruptcy.

Here are some advantages for filing bankruptcy honest debtors without assets might want to consider. Filing bankruptcy can:

  • Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts.
  • Stop wage garnishments.
  • Stop debt collection harassment.
  • Restore or prevent termination of utility service for nonpayment of previous bills.
  • Get your drivers license back under certain circumstances.
  • Allow you to keep all non-exempt property.
  • Can extend certain tax obligations, student loans, or other such qualifying debts.

If you decide you want to be relieved from the stress associated with debt by filing a bankruptcy, common sense indicates you might need a bankruptcy lawyer in order to help you understand complex bankruptcy laws and how they 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 Monmouth or Ocean, New Jersey, contact us here today at www.betterbankruptcy.com .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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