Debt Is The Problem. Bankruptcy Is The Solution.
Almost everyone who comes in for an initial consultation says the same thing – “I never planned on being here.” Debts that once were manageable became unmanageable, generally due to unexpected job loss, business decline, divorce, illness, injury or an adverse legal judgment.
If you are unable to make the minimum payments on your credit card debt or regular mortgage payments, if you are making the minimum payments but the high rate of interest makes it impossible to reduce the total debt owed, or if you are experiencing unrelenting harassment from creditors, you should be considering bankruptcy.
Bankruptcy can also be used to stop mortgage foreclosure, collection lawsuits and wage garnishment. If you are using certain assets, such as retirement funds, which are “exempt” from creditors, to pay your creditors, you should be considering bankruptcy.
What’s The Worst That Can Happen?
Bankruptcy can negatively affect credit scores. Many people will experience a decrease in their credit scores after filing, particularly those who are able to make the current payments on their mortgage and credit card debts and have high credit scores as a result.
Other people will see an increase in their credit scores after filing, because credit scores are extremely sensitive to missed mortgage payments and, to a lesser extent, credit card payments. Filing bankruptcy may remove those unpaid debts from credit reports which allows low credit scores to be rebuilt. See Re-building Your Credit After Bankruptcy.
The fact that you filed for bankruptcy will be reported as a footnote on your credit report for up to 10 years. See Horrible Things That Happen When You File Bankruptcy. Filing bankruptcy itself is not factored into your credit score. The score is based upon your income, lines of credit and your ability to make timely payments following filing.
How Do People Make The Decision To File?
You have to decide whether avoiding a footnote on your credit report is worth the physical and financial burden of dealing with unmanageable debt. For some, the decision requires a rational analysis. For others, the decision is emotional.
Filing bankruptcy is a right all Americans have. It’s in the Constitution. Millions of individuals file bankruptcy every year. Most understand that they have a contractual and ethical obligation to pay their debts. But they can’t. It’s that simple. Their circumstances have changed. Many offered to settle their debts for what they could afford to pay, but their offers were rejected by creditors, many of which charge interest rates so high that the original debts already have been paid twice or more.
Notwithstanding the obvious financial benefit a “fresh start” in bankruptcy can provide, people often avoid filing bankruptcy because they may consider bankruptcy embarrassing or a sign of failure. People who drive cars made by General Motors and Chrysler or eat Twinkies made by Hostess don’t attach any bankruptcy “stigma” to those companies which filed bankruptcy. Yet, the same people may consider their own relief from unmanageable debt as unethical and fail to take advantage of laws that can help alleviate their situation.
Should Your Spouse Also File?
If you are married, you may wonder whether you, your spouse or both should file. Married individuals can file bankruptcy together. Sometimes, only one spouse will need to file. However, if both spouses are liable for a debt and only one spouse files, the creditor will look to the non-filing spouse for payment. If both spouses file, you may be entitled to keep more property.
If You Are Tired Of Dealing With Unmanageable Debt, We Can Help.
If you can see yourself moving towards financial freedom, if you feel that filing bankruptcy might be the right decision for you, Balbus Law Firm can help. We are committed to answering all of your questions about bankruptcy, helping you understand your options in bankruptcy, helping you decide whether both spouses should file, and assisting you throughout the bankruptcy process.
To go over any bankruptcy questions in a free initial consultation, call 203-286-4121 or e-mail us.
Balbus Law Firm is a debt relief agency. We help people and businesses in New York and Connecticut file for bankruptcy relief under the Bankruptcy Code.