Many people think bankruptcy is the worst decision they ever have to make, no matter their situation. However, this is a common misconception for several reasons. Our attorneys in Wilkes Barre, PA, believe that bankruptcy can lead to a fresh new start if you go through the process with a trustworthy and experienced legal team at your side.
Here’s why filing for bankruptcy is considered a bad thing and what advantages come with making this difficult decision.
Filing Bankruptcy & What It Entails
Bankruptcy is a process that helps you legally manage your debts. That’s because it simplifies the process of paying them off. When you file for bankruptcy, you can stop legal procedures that make drastic changes in your life, such as foreclosure of your house or repossession of your car.
There are two ways to file, and each brings its own benefits: Chapter 7 and Chapter 13. Here’s what you need to know about each process and what you can expect from the experience.
Filing Chapter 7
Since bankruptcy will help you deal with debt and get your life on track, there are various steps, such as eliminating it through Chapter 7, a liquidation bankruptcy. Some reasons people do this are:
- Accidental injury
- Automobile accidents
- Death of a family member
- Sudden illness
- Permanent decrease in income such as retirement
No matter what your reason is, the bankruptcy court does not determine whether you deserve debt relief. Unlike Chapter 13, Chapter 7 cases eliminate debt within three to six months of filing rather than creating a repayment plan that lasts for years. This is a huge benefit to people that need relief fast.
Filing Chapter 13
If you want to restructure your debt and make a plan to pay it off, then you should file for Chapter 13. It is often called reorganization bankruptcy since it allows people who can partially pay debts to set up repayment periods.
This option gives people who can afford to pay some debts the chance to do so without completely wiping them out.
Benefits of Bankruptcy
Whether you’re filing Chapter 7 or Chapter 13, you are still taking action and responsibility for your finances. For many, bankruptcy is the only option that makes sense that should not be seen as bad for those that need it. It forgives the obligation to pay missed payments and can save you from financial ruin.
Though it can damage your credit, it gives you a way to start anew and handle your finances in a less overwhelming position to build your credit score up again.
Bottom Line: This Isn’t the End
So, why is filing for bankruptcy considered a bad thing? It has a bad reputation because many people misinterpret what it actually does for those who file for it.
Remember that while it’s easy to see this as a huge financial setback, it is a new beginning to bring relief. And you’ll only improve the experience with a team of professionals helping you through each step of the process.
Our attorneys at JPP Law in Wilkes Barre, PA, are here to help you navigate bankruptcy. Call 570-822-JPP1 to get a free consultation today and discuss your options with our expert legal team.