Everyone wants to have enough money to pay all their debts, take care of their needs and save a bit for a rainy day.
However, this is not always the case. Today, surviving in a world with financial instability is not easy. If you have come to realize that you are financially in a bad situation, you may have thought about personal bankruptcy. Perhaps if this is your only option your should consider speaking to a bankruptcy lawyer. Do not feel embarrassed about your decision. You may have no other choice. However, seeking bankruptcy protection is your legal right. This may, in fact, be your best option to build up some financial stability for yourself in the future.
In the not too distant past, you may have read and heard about big corporations like the Lehman Brothers declaring bankruptcy. Individual too can file for bankruptcy, and there are two methods for this to be done. They are called Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. A qualified bankruptcy lawyer can advise you on the differences between the two and which one may suit your situation. You may be looking for a bankruptcy attorney right now, and there are many firms who can guide you through the process. Since many people started abusing the bankruptcy law there was a change made in 2005 which makes it more difficult to file for bankruptcy. However, if you are indeed in severe financial trouble, it would not be an issue for you to meet the assorted criteria to file for bankruptcy.
There are a few things you should consider when filing bankruptcy. Below are a couple of them:
Low credit Score after Bankruptcy
Filing for bankruptcy puts your credit score right to the bottom. A credit bureau will normally start a credit score from the 300 range to the 850 range, 300 being the worst. You should be prepared to accept that your credit score will be much closer to the 300 mark. However, credit scores can be adjusted over time and can take a few years but with careful planning you should be able to get back into the 600 to 700 range.
You will be asked if you ever filed for Bankruptcy
Normally a credit report indicates financial status for the preceding ten years. However, when applying for a job or a credit facility the question asked is “Have you EVER filed for bankruptcy.” It never asks if you filed for bankruptcy in the last ten years. So even though your bankruptcy will not be shown in your credit history it will always be in your life.
You could keep some assets even if you filed for bankruptcy
Even though the creditors have the right to reclaim your assets, there are definitely some assets that you own that are protected under the bankruptcy law. You are allowed to keep these “exempt assets” when you have filed for bankruptcy that prevents the creditors from any repossession activities. Since it is such a crucial issue to retain as many assets as possible, you should consult your bankruptcy lawyer to get the maximum exemption possible. The act of filing bankruptcy is the easiest, but making the decision to do so is not easy. It will change the way you live and should not be taken lightly. Always consult a lawyer before taking any action.