If your resolution for the new year is to get out from under your debt, you may have considered and then quickly tossed aside the option of bankruptcy. Many people still view it as an admission of failure. They may be afraid of the potential ramifications on their credit score. However, bankruptcy is often the best way to deal with overwhelming debt and take control of your financial life again.
There are two primary personal bankruptcy alternatives: Chapter 7 and Chapter 13. Not everyone can qualify for Chapter 7 because their income is too high. However, if you do, you can get rid of a good portion of your debt by allowing certain assets to be sold.
Many people choose Chapter 13 bankruptcy because they don’t have to give up as many assets. However, they have to commit to multi-year repayment plan to pay off their debt. For people with a steady income who need such a plan to get them on the right track, this can be a good option.
Deciding when it’s time to take the step of filing for bankruptcy is a big decision. You don’t want to overreact to a few bad months. However, you don’t want to wait until you’re being badgered by collection agencies and unable to pay your basic living expenses.
An experienced New Jersey bankruptcy attorney can help you assess your situation and review a variety of options with you — including but not limited to bankruptcy. If you decide that this is the way to go, your attorney can help you determine which type of bankruptcy you can qualify for and which is best for you. He or she can then help you through the process so that the impact on your life isn’t any more consequential than it has to be, and you can come out on the other side financially stronger and wiser than ever.
Source: Huffington Post, “When Bankruptcy Can Be of Great Benefit,” Allan Smith, Dec. 09, 2017