Addressing the Fear of Bankruptcy Filing

Addressing the Fear of Bankruptcy Filing "The decision to declare bankruptcy is extremely difficult for the majority of individuals. There is first the anxiety of the unknown. Some individuals fear that their credit will be ruined permanently. Others are afraid of losing their property. Others, however, dread the embarrassment that will ensue if their friends or neighbors find out. Some worry that their creditors will torment them in court.Although declaring bankruptcy is a very difficult and consequential decision, the majority of people's apprehensions are unfounded. Ironically, most individuals' credit scores increase after filing for bankruptcy. The majority of bankruptcy filers already have relatively low credit scores. This occurs as creditors continue to report delinquent balances and obtain judgments. Upon filing for bankruptcy, a person's debts are generally discharged. As a result, their credit score is no longer negatively impacted by reported delinquent payments. It is not uncommon for a person's credit score to increase by 100 points within a year of filing for bankruptcy.People are also concerned about losing their property. This concern is also unfounded for the majority of individuals. The Bankruptcy Code permits individuals to keep the majority, if not all, of their assets. A person with $10,000 in the bank or up to $1,000,000 in a retirement plan could still file for bankruptcy, for instance. The code protects a considerable portion of a person's property in an effort to assist them in starting over. Additionally, a person can retain their car and home if they agree to continue making payments on those assets.Most people find it difficult to file for bankruptcy because they dread humiliation or believe they have failed in some way. Nobody ordinarily employs bankruptcy as a deliberate tactic. First, your neighbors and acquaintances will not learn that you have filed for bankruptcy unless they routinely review the court files. Filing for bankruptcy should be viewed from a financial perspective rather than as a moral issue. Divorce, illness, the loss of a job, or a substantial decline in the value of a home are examples of problems that frequently have a negative impact on a person's financial situation. If not addressed, these issues may inflict havoc on a person's finances. Individual bankruptcy is comparable to that of corporations such as General Motors and Chrysler that found themselves in dire financial straits. These corporations filed for insolvency so they could reorganize and resume making a profit. What is acceptable for an inanimate corporation should also be acceptable for a person.Some people fret that their creditors will harass them in court. Many of these individuals are unaware that bankruptcy prevents creditors from harassing them. If an individual is unable to pay their debts, a creditor may garnish their wages or seize their property, such as a vehicle or household goods. Insolvency prevents creditors from collecting. Although creditors have the right to question a Debtor in court, it is uncommon for them to do so.Filing for bankruptcy is a decision that should only be made after consultation with an expert in the field. A qualified and considerate bankruptcy attorney will recognize that this is a significant and difficult decision. The majority of bankruptcy attorneys offer free consultations to assist clients explore and comprehend their options.
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