Personal bankruptcy is the process of legally declaring the inability of an individual to pay off his debts. In many cases, bankruptcy might not be the only option available to you for dealing with your financial difficulties. Consulting an experienced attorney can help you gain awareness regarding your rights and available options. However, in case it is the only option available, it is important to maintain a positive approach towards it. Despite all the conventional negativisms associated with the concept of bankruptcy, it is important to know that there are several positive aspects involved in it:
- In spite of the fact that bankruptcy can impact your credit record severely, it is also true that once the entire process in complete, all your past credit records get cleared, providing you a chance to start afresh.
- As soon as your personal bankruptcy filing is accepted by the court, and your bankrupt status is confirmed, the creditors are legally bound to stop making direct calls to you. To get an instant relief from the harassment's caused to by the lenders is probably one of the most positive parts of bankruptcy filing.
- Nothing can stop you from filing for personal bankruptcy more than once if you want to and need to. However, in some forms of bankruptcy, there is a need to maintain a particular period of time between two filings. For example, while chapter 13 bankruptcy can be filed as often as you need, there's a need to maintain a period of eight years between two successive filings for chapter 7 bankruptcy.
- It is not necessarily true that you would lose all your assets if you file for personal bankruptcy. Instead, there are provisions in the bankruptcy laws that enable you to retain certain valuable assets and also get the advantage of easy repayment plans in accordance with your conveniences and requirements.
In case you decide to file for personal bankruptcy, it is important to make a choice between chapter 7 bankruptcy and chapter 13 bankruptcy. Again, a knowledgeable attorney can help immensely in making the right choice with regard to your financial status, conveniences and needs.
Chapter 7 bankruptcy is ideal for individuals having non-exempt assets that can be liquidated by the court in order to pay off the debt amount. However, it has been seen that merely 5% of the people opting for chapter 7 bankruptcy possesses any non-exempt assets.
Chapter 13 bankruptcy on the other hand is suitable for people who in spite of their financial crisis are having a fixed annual income. Such individuals can enter an easy repayment plan through negotiation with the lenders, which can also often bring down the debt amount to be paid. Debtors can then pay back the credit amount over a fixed period of time which actually helps them immensely.
An experienced and knowledgeable attorney is your best source to obtain sufficient information on personal bankruptcy, its advantages and flaws, and the right option for you. It is extremely important to know in details your legal rights, liabilities and options before you decide for bankruptcy filing.