When you are undergoing financial stress, it's natural to do what it takes for alleviating the anxiety and pressure of the situation. Right from rent to mortgage to other regular payments, you can feel dreaded to release yourself from the debt.
On average, around 1.2 million Americans are compelled to file bankruptcy for various reasons like medical expenses, marital issues, and severe poverty. So before you consider filing bankruptcy, here goes the top 5 things to consider.
- Bankruptcy can have an impact on the outcome
It's highly likely that you will either file Chapter 13 or Chapter 7 bankruptcy. And even though there are other kinds of bankruptcy, you may not be eligible to benefit from those.
In Chapter 7 of Bankruptcy, all your assets will be liquidated while the debts will be discharged. This implies that when the bankruptcy will come to an end, you are likely to be left with no debts unless you owned any assets that weren't eligible for discharging.
On the flip side, in Chapter 13, the debts will be reorganized in such a way that it becomes a pay plan. As a result, you are not compelled to liquidate the assets.
- Bankruptcy can have a positive effect on the credit
Even though you are worried about the credit ranking delay that may be brought about by filing bankruptcy, it will remain in the records for some time. After that, you can actually improve your credit score. As the dischargeable debts get cancelled, you can move forward with a clean financial slate and start rebuilding the credit profile positively.
- Getting an automated stay against creditors
When you file for bankruptcy, the court will surely issue a sty order against all debt collecting activities. Even though your debt is not suspended, it will definitely delay the proceedings until the case comes to an end or the stay has been lifted.
- Bankruptcy is a safe and easy option
Contrary to popular belief, a bankruptcy is a relatively easier and fast process to get you rid of the unworthy financial situation. In most cases, you are likely to be awarded an automatic discharge within 9 months. Moreover, when you don't have any non-exempt assets or extra income, bankruptcy filing is surely the most cost-effective option.
- You can keep a part of your property
When you are filing bankruptcy, you will be able to keep a small amount of the property as an exemption. These are assets that you can shield from liquidation. In most cases, exempt properties include pension, household belongings, motor vehicles, furnishing and other things as per your individual situation.
It's worth noting that these are also the primary causes why you should consider working closely with a bankruptcy lawyer. He is proficient and skillful enough to support you through the challenges and make sure that the case goes as it has been planned. If you are facing such an undesirable situation, contact us today and settle it with the best backup you can think of.
Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.