Why might bankruptcy be the right choice for you in 2018?

Why might bankruptcy be the right choice for you in 2018?

The new year brings new changes. Many people use the new year to work on improving their finances. They may try to pay down debt, increase their income or save for an education. One of the things that many people consider during the new year is filing for bankruptcy.

A person that may consider filing for bankruptcy must determine if doing so is right for them. Bankruptcy is a helpful tool for eliminating debts that stand in a person’s way when they’re trying to get ahead. However, filing for bankruptcy is a serious process and it is important to speak to an experienced bankruptcy attorney, such as the attorneys at Zellar & Zellar, Attorneys at Law, Inc., to determine whether bankruptcy is the right option. There are drawbacks and limitations when a person files for bankruptcy. It’s important that the person considering filing for bankruptcy determines if bankruptcy is right for them. Here are five things to consider when determining if bankruptcy is the right choice in 2018:

1. The filer has more debts than income

Bankruptcy is a viable option when a person is unable to pay back their debts. When debts spiral out of control, bankruptcy allows a person to eliminate or restructure their debts. There are really two types of bankruptcy that a person might qualify for depending on their income and debts, Chapter 7 and Chapter 13. In some cases, the person can fully eliminate debt. In other cases, they make monthly payments in exchange for a discharge of some of the debts.

2. The circumstances aren’t going to change any time soon

When a person is in a situation where they are deep in debt with no sign of things turning around, getting rid of the debts can be well worth the cost of filing for bankruptcy.  Depending on the chapter, certain non-exempt assets may be liquidated in order to pay back a portion of the debt owed.  It is best to discuss whether a Chapter 7 liquidation bankruptcy is the right choice for the given situation.

3. Debts involved are the type that are dischargeable

Not all debts can be eliminated in bankruptcy. Debts like child support, alimony, recent income taxes and student loans are generally not subject to discharge. Filing for bankruptcy may still be worthwhile if the debtor has a lot of unsecured debt like credit card debt that gets eliminated or reduced in a bankruptcy proceeding.  Bankruptcy can also be helpful if the debtor is behind on mortgage payments and wishes to surrender the home.

4. It’s been six years since the last bankruptcy filing date

A debtor can only file for bankruptcy after a certain period of years has passed since the date the prior case was filed.  A debtor can only file for Chapter 7 bankruptcy every eight years.  A debtor must wait four years from the filing of a Chapter 7 to file for Chapter 13 to be eligible for a discharge.  A debtor must wait six years after filing a Chapter 13 case in order to be eligible for a Chapter 7 discharge.

5. The debtor is an honest debtor

The bankruptcy system helps honest people who get behind in their debts. When a person charges large amounts of debt for things like a vacation or other luxury items, the court won’t approve a bankruptcy petition soon after. Bankruptcy is a good way to get back on track when a person honestly falls on hard times.

Bankruptcy isn’t right for everyone. If someone has a large amount of debts, bankruptcy may be right for them. It’s important to look at the types of debts involved in the case to make sure that they’re dischargeable in bankruptcy proceedings. There are benefits to filing for bankruptcy, and in the right circumstances, bankruptcy allows good people to get a fresh start.  It is important to discuss all available options with one of the experienced bankruptcy attorneys at Zellar & Zellar, Attorneys at Law, Inc., before any final decision to file is made.  Call to schedule a free consultation with Zellar & Zellar today.


© Zellar & Zellar, Attorneys at Law, Inc., 2018; All Rights Reserved.


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