The Details about Chapter 7 Bankruptcy

Many consumers are considering filing Chapter 7 bankruptcy to get out of their deep pool of red ink. They may be up in the night worrying about bills and trying to figure a way out. Not many individuals want to file bankruptcy and most of them probably had every intention of paying each and every loan payment back on time. Unfortunately, hard times hit for them and lots of other people. Responsible citizens with good jobs, homes they were purchasing and discretionary surplus in their bank accounts have suddenly found themselves in a less fortunate position. They may have lost their jobs, foreclosed on their homes and their bank accounts are currently showing a zero balance. They are scrambling and don’t know what else to do. Are you thinking of contacting a lawyer to help you get out this mess? Here are some details about the process to think about:

• There will be ramifications initially: Although things will balance out over time, a person who chooses to file this legal action must be prepared for some initial fallout. Some insurance premiums may rise since they are linked to credit. Credit cards will have to be relinquished and cash will be the new way to pay. FICO scores will be reduced.
• Have you considered all the alternatives: Before deciding to file bankruptcy, individuals should ask themselves whether a second job might help, whether negotiating with creditors to get lower rates or payments is an option, or whether credit counseling has been tried? If all of these have been ruled out, it may be time to consult an attorney.
• Something must be done: Ignoring one’s bills and the bill collectors will not only wreck credit scores but may result in further problems. Creditors can seize assets and property which will ruin your FICO numbers anyway. This type of blight on your credit report can last longer than the bankruptcy. Facing the problem and contacting a law practice who focuses on bankruptcies will be a way to move forward and get past this troubling time.
• Not as shameful as in yesteryear: Many citizens are ashamed of the fact that they will be filing Chapter 7. They may put it off for as long as possible hoping for a miracle. They should realize that many others are in the same boat. Due to job losses, bad mortgages, balloon payments, divorces and medical expenses, many people are finding themselves wiped out financially with no other alternative.
• What bankruptcies won’t get rid of: Unsecured debts can be erased but others may remain. Student loans can’t be forgiven, secured debts such as car loans will often require a different tactic, taxes can’t be wiped away and alimony or child support payments must still be paid off.

Filing for bankruptcies is never easy. Contacting a lawyer to discuss your situation to see if Chapter 7 is the answer for you will be a wise first step. After going over all of your debts, assets and individual circumstances, your legal representative can offer advice about whether this is the right choice for you. Worrying about money can be detrimental to your health and damage your relationships, so taking steps toward resolution will be your best bet.