What ideas and emotions come to mind when you think of filing a personal bankruptcy? While industry experts rarely use the term, many consumers think of personal bankruptcy as a “last resort,” an option only to be exercised when nothing else has worked. Because of this designation, many people procrastinate when filing, waiting until disaster is nearly upon them before calling an attorney.
According to industry experts, the “last resort” concept is misleading and can hinder the individual from utilizing their best course of action. In fact, bankruptcy attorneys understand that when you remove emotion and look at the numbers, bankruptcy is often the most prudent way to address your situation. Other options may include debt consolidation loans, credit counseling programs, or debt settlement negotiations with creditors. But because humans tend to mix emotions into their financial decisions, speaking with a bankruptcy attorney before making any significant moves is recommended.
Not the Last Resort – The Earlier, The Better
There are reasons that people are resistant to beginning the bankruptcy process. The most common form of personal bankruptcy, Chapter 7, does remain on your credit report for ten years, one of the longest-lasting penalties among available solutions. It is also possible that if some personal assets don’t qualify for an exemption, they may be liquidated in the process.
Still, if bankruptcy is looming, those who don’t wait until the last moment to file experience a more rapid credit recovery than those who put it off. Not only that, but less than 5% of those who file for bankruptcy under Chapter 7 will lose their assets.
In other words, when Chapter 7 seems inevitable, it is best to begin the process as soon as possible (or when your attorney advises.)
You Won’t Outlast the Creditors
Attorneys often point out that waiting for your situation to improve, ignoring creditors, or hoping for a financial windfall rarely works out well. While we understand that a bankruptcy decision may feel overwhelming, it is actually a logical and practical decision. Exploring all potential solutions, including bankruptcy, should begin once you realize you’re struggling to pay your bills. Your creditors may be willing to work with you, but you won’t outlast them should you choose not to take action and wait it out.
Educating yourself and identifying potential remedies before the situation worsens makes sense. Should the best option be bankruptcy, waiting to file can wear heavily both on your wallet and your mental health. When financial assets are entirely depleted, a fresh start is all the more difficult to achieve.
Processing any Negative Emotions Associated with Bankruptcy
We have discussed in the past that no one should feel guilt or shame when choosing bankruptcy. For most people, filing for bankruptcy is the best and most intelligent option available when circumstances have gotten out of control. While some attach negative connotations to filing, these emotions are misplaced and could interfere with your implementing the best strategy to achieve stability.
An experienced bankruptcy attorney will tell you that many intelligent, successful people have been in overwhelming or unexpected financial crises. It can happen to anyone, and bankruptcy provides a legitimate avenue to recovery.
So is bankruptcy a last resort? It shouldn’t be! Bankruptcy should be considered as one of several possible solutions to financial difficulty – and your decision to file should be based on the facts at hand.
Richard V. Ellis has helped hundreds of Sarasota residents to leave financial difficulties behind them through bankruptcy. Call today for a consultation and to learn more about your options and possibilities.