When debts become unmanageable, or the house faces foreclosure, most people think they are about to go bankrupt. Though bankruptcy may seem like the only way for some people, it has serious consequences that everyone should consider before pursuing that route.
One thing people should know about filing bankruptcy is that it remains on the credit report for seven to ten years, based on the type. Bankruptcy makes it difficult to get a mortgage, car loan, or credit card in the future. Filing for bankruptcy could affect the ability to rent an apartment and get a job, leading to higher insurance rates. It’s vital to hire bankruptcy lawyers to assist with the process. They offer legal advice, prepare legal documents, and represent their clients in court.
Filing for bankruptcy has two options: Chapter 7 and Chapter 13. Under Chapter 7, bankruptcy liquidates an individual’s assets to pay creditors and absolve the debt. Under chapter 13, a person who files bankruptcy ends up paying the debts over a specified period but keeps the assets. Bankruptcy should be the last resort, and one should think of other options, such as negotiating with the creditors and working out a payment plan comfortable for everyone.
Filing for bankruptcy or having bankruptcy issues can both be scary things. You may not know what to expect or what your future may look like. It’s times like these that you want a strong, experienced set of people behind you to help advise and guide you through what comes next. Do know that bankruptcy isn’t necessarily the end of the world — taking a nice, deep breath and starting to strategize may help alleviate some of that panic. In some cases, filing for bankruptcy may be the best thing to do — you can always start rebuilding a credit score and improving your credit history. It gives you a fresh start fiscally and will mentally improve your thinking and ease some of your tension.
Bankruptcy: It’s A Scary Word
Although the word “bankruptcy” may conjure up scary images of being homeless and on the street, it can actually be a lifesaver for some people who suffer from bankruptcy issues. It’s a financial measure used to help people who simply can’t pay their debts. It does this by liquidating their assets to repay the debt they currently owe or by making a repayment plan. Either way, they get off to a fresh start and hopefully don’t fall into the same kind of debt the second time around.
In February of 2015, there were almost 3,500 files for bankruptcy every day. Some people file for bankruptcy because of incredible medical expenses — over 60% of personal bankruptcy is filed for this reason — while others just have debt accrued from credit cards, loans, etc. Businesses may have bankruptcy issues and fold for different reasons. Statistics have shown that about 90% of all chapter 11 debtors (individual businesses) have under $10 million in assets or liabilities, annual revenues, and under 50 employees. Many times they file bankruptcy to reorganize their system, but have too much debt to do it under the chapter 13 clause. With these types of commercial cases, sometimes it’s often best to have bankruptcy experts guide you through the process.
What Will You Want To Look For In Bankruptcy Mediation?
You’ll definitely want to make sure that the firm you use has case managers who are available to help you whenever you need it — be that on a weekend or early in the morning or late at night. Since most people’s jobs run during the day, it’s important that you be able to continue with your job and have consultation. Why give up one? Additionally, you’ll want to look for a firm that has former judges or practitioners on staff who know the inside track and have a high success rate achieving settlements, because of their expertise with strategies and arguments. Good mediation skills are also highly valued, as they can help pare down issues and settle cases even during the process. Lastly, you want to make sure the arbitration is set at a fixed price, so it doesn’t drag on unnecessarily at your expense.
Set your mind at ease and look into hiring bankruptcy mediation services or a good lawyer to help guide you through the process.