Many clients wonder if they are “broke” or “underwater” enough to file for bankruptcy relief…
The short answer is that bankruptcy is always an option regardless of how much debt one has accrued. In layman’s terms, what it comes down to is this: If you do not believe that you will be able to keep up with current bills while maintaining a reasonable standard of living, you are likely entitled to a “fresh start” via the US Bankruptcy Code in order to regain control of your financial situation.
The great thing about the bankruptcy code is that so much of your personal property is exempt from creditors. Typically, unsecured debts like credit card bills, payday loans, and personal loans are eliminated upon filing a Chapter 7 bankruptcy. Secured debts such as home mortgages and auto loans are protected by collateral (the home or vehicle itself), and are not “dischargeable” in the same sense as unsecured debt, but Experienced Bankruptcy Attorneys are able to navigate these waters in order to ensure you are able to keep most if not all of your property throughout the entirety of the bankruptcy process. Generally, any student loan debts or tax-debts (within the past 2 years) are non-dischargable. Most importantly, you’re credit worthiness typically increases significantly within a year or two of filing (with some client’s reporting being offered new credit lines in as little as 1 month post-filing). Lenders would rather see an individual who took care of their financial issues through a lawful bankruptcy than an individual who keeps sitting on unpaid bills month after month.
Remember: Bankruptcy is not a life-altering decision. There is no reason your family, friends, or employer need to find out about a filing. It will be your creditors, the bankruptcy court, and yourself who will be in the know. Every individual has the right to earn a living, regardless of the debt they took on in their past. If your liabilities/debts have become so large that your are simply unable to pay them in any timely manner, and you are facing threats of foreclosure, repossession, wage garnishment, lawsuits, or the like, take comfort in the fact that the US Bankruptcy Code was meant to protect your livelihood, and your right to make a living !