The small amount of money that you owed someone may have turned into a gigantic pile of debt that you’re having too much trouble getting out of even after you’ve already used up every debt repayment method available at your disposal. So the last thing left for you to do to relieve yourself of the burden that your debts are placing on you is to file for bankruptcy. But as the word itself has mostly negative connotations to the average person, you may have asked yourself if bankruptcy is for you. To help make a more informed decision as to whether you should pursue bankruptcy or not, here are some things for you to consider:
1. There are several types of bankruptcy, but only two are most commonly being used by individuals filing for it.
The very first thing that you should consider if bankruptcy is for you is that there’s not only one but two types of it that you can file for in court.
- The most popular type of bankruptcy for individuals is Chapter 7 – if you’re fine with most of your assets getting seized and sold to your creditors, that is. You may keep some of your assets, but that would depend on your state’s list of bankruptcy exemptions.
- If Chapter 7 isn’t desirable for you, there’s Chapter 13 bankruptcy for you to consider as well. Though slightly more complicated compared to Chapter 7, Chapter 13 only requires you to come up with a timeline of how you plan to settle all your debts to your creditors.
2. Once you’ve filed for bankruptcy in its corresponding court, you’ll get charged a filing fee.
You might be asking how you’re supposed to pay the filing fee charged by a bankruptcy court if you’re struggling to repay your debts in the first place.
- You can hire a lawyer who’s willing to help you pro bono and take care of paying the filing fee that the court charged you.
- Once you’ve managed to bounce back from your financial setback, you can repay the bankruptcy court filing fee that you owe your lawyer as well as their fees for the legal services that they’ve rendered to you.
3. Filing for bankruptcy wipes some of your debts clean but not all of them.
Your initial idea of filing for bankruptcy may be that it can solve all of your debt problems in an instant which should allow you to have a fresh financial start.
- Unfortunately, only debts like credit card charges, medical and hospital bills, and contractual obligations, to name but a few, can be relieved – or discharged to use the more bankruptcy-related term.
- If you’ve got non-dischargeable debts on top of your dischargeable one, you should repay them using traditional methods first before filing for bankruptcy.
More than 700,000 individuals in the United States have filed for bankruptcy in the corresponding courts between 2016 and 2017. That statistic should ease your initial worries as to whether you should declare yourself bankrupt, but in case that didn’t convince you much, you should take a peek at the above-listed things for you to consider when asking yourself if bankruptcy is for you. After all, you’ll want to think it over first before doing it. However, if you still find yourself confused as to how to proceed with filing for bankruptcy, seeking legal counsel from a bankruptcy attorney should solve your problem as they can walk you through the entire filing process slowly but surely.