Anyone dealing with financial hardship or debt collection know all too real the stress of finding the right debt relief solution. While some people may say bankruptcy is the best way to alleviate your debt, the truth is that is isn’t always right for everyone in every situation. It is a great tool, but you should get to know the process a little before deciding if it is right for you.
Every person carries a unique financial situation. No two financial profiles are the same and we all carry different income levels, debt amounts, have different amounts of money in the bank, and various assets. It is because of these unique financial profiles that no one can claim bankruptcy is the end all answer for your trouble. Before filing for bankruptcy it is important to review your financial situation with a professional and discuss the risks and benefits of each. You may be able to resolve your debts by negotiating directly with lenders or rolling them into a consolidation loan. Either of these solutions are good places to start your investigation into the debt relief process. However, keep in mind that if you are at risk of garnishment, repossession or foreclosure time could be of the essence.
Debts and Assets
The reason that some choose bankruptcy over other forms of debt relief is the range of debts it can resolve, as well as how assets can be better protected. If you decide bankruptcy is right for you there are chances that you can include more debts and get out of debt easier than other forms of debt relief. For example, all unsecured debts like credit cards and medical bills can be easily eliminated or affordably repaid in a Chapter 13 bankruptcy. Mortgages, car loans and some tax debts can also be resolved through a bankruptcy plan. How your filing results in a discharge depends on the nature of your debts. Similarly, your assets are important in bankruptcy and filing can offer a greater level of protection against liquidation in most cases. Even in a Chapter 7 filing you are going to find asset exemption rules that can keep your property in your hands.
Just like with any major life decision, consult with a professional about your debts in bankruptcy. There is no need to go through the trouble of using the court, paying fees and making the solution more than it needs to be. The bottom line is that filing for bankruptcy is meant to be a tool for helping those that truly need it, not those that just want an easy answer.