Bankruptcy was once seen as a solution only for the most extreme business and personal situations. But as families began to accrue more debt to survive in difficult economic times, bankruptcy has become more common. A recent report indicated a significant increase in the number of older Americans facing and filing for bankruptcy.
Bankruptcy now carries less stigma, as more individuals have acquired various combinations of loans, resulting in the average American household being in debt. Mortgages, credit card bills, car payments, student loans, and medical bills have put people in an almost impossible situation, especially in a tenuous employment environment.
Even though bankruptcy happens more frequently these days, many people still have questions regarding the process. Precisely what is bankruptcy, and what are your options for debt relief?
Bankruptcy Defined
Bankruptcy is a legal process that provides a solution for an individual, family, or organization who is financially unable to pay off their accrued debts.
The bankruptcy court will review your debts, liabilities, and assets. The goal is to reduce debts or eliminate them altogether, sometimes using assets to pay off a portion of these debts.
The system is meant to offer people a fresh financial start. Without this relief system, many people would never get out of debt as the interest continually grows and makes bills harder to pay off month by month. Being in debt can cause significant disruption and distress, from dealing with harassment from creditors to continually worrying about resolving the situation. Through the bankruptcy process, people are given a second chance at living a less stressful life.
Is Bankruptcy Right for You?
Even with professional help, bankruptcy is a serious undertaking. It can significantly impact your credit score for many years, which in turn affects your ability to purchase a home, car, or other major items. When considering bankruptcy, you must consider if the debt relief is a fair tradeoff for the possible consequence.
You will need to ask yourself important questions – and be willing to answer honestly.
* How long will it take to repay the totality of your debt?
* Are you legitimately unable to make payments to reduce your debt?
* Do you have the necessary information and documents for the court?
* Are you prepared for the result of a bankruptcy on your record?
An experienced bankruptcy attorney is an invaluable asset when making these decisions. Most people are considering bankruptcy for the first time, and the prospect can be daunting without someone to help you through the nuances and intricacies of the process. An attorney can offer insight and recommendations based on solid experience and knowledge so that you can make an informed decision.
Requisites for Bankruptcy
The legal system in the United States requires those looking to file for bankruptcy to take credit counseling courses. After filing, debtor education courses are required. The court must receive certificates of completion of both of these courses before they discharge any debt.
Once the credit counseling courses are completed successfully, the individual can fill out the petition to file for bankruptcy, found on the U.S. Courts website. A bankruptcy attorney will assist in determining the type of bankruptcy you are filing for and which forms are relevant to your case. Your attorney will also have an in-depth knowledge of the local Florida bankruptcy laws, which may affect your situation.
If the courts accept the petition, the case is typically assigned to a trustee. This trustee is a party not employed by the courts who oversees the progress of the case. The trustee will review submitted documents to ensure that all assets have been accurately recorded and collected and that the filing party has committed no fraud.
How to Begin
If you are in debt and struggling with how to resolve your situation, call the law offices of Richard V. Ellis today. We can walk through your case with you and determine if proceeding with bankruptcy is the best option for you.
