Filing for bankruptcy can be a very smart decision, but it is not a smart decision for everyone. Many different factors must be taken into account before making the decision to file for bankruptcy and it is a decision that should not be taken lightly.
First you should consider all possibilities that could get you out of your current debt situation. One possible alternative is to come up with a repayment plan based on your current income. This approach basically allows you to make a little progress with each paycheck you receive. You will most likely be living paycheck to paycheck, but if you are in a lot of debt, you are probably already doing this. If you think this approach is possible for you, you must then consider whether you can emotionally deal with the lingering debt and harassing telephone calls you most definitely receive from your creditors until you have paid everything off. This could last for years and take a toll on your mental and physical health. If you think you can do this financially, but do not believe you can handle the mental or physical stress that comes with it, then this approach may not be a good one for you.
If the above approach is not for you, then you might want to consider filing for bankruptcy, but you must first fully understand which chapter of bankruptcy you are eligible to file and how bankruptcy will affect your debts, assets, future, and health. There are generally two types of bankruptcies an individual files. The first is a Chapter 7, which is a strict liquidation of your assets and a wiping out of your debts, and the second is a Chapter 13, which is a reorganization of your debts. Which chapter you are able to file mostly depends on your household income and family size.
If you are filing bankruptcy because your student loan payments are more than you can handle or you are behind on your child support, you might be shocked to find out that these types of debts are not dischargeable through a bankruptcy. There are other types of debts that are also not dischargeable through a bankruptcy, so it is always a good idea to speak with an attorney first.
If you own a home, have a savings account with a high balance, or any other asset with a high value, it is also a good idea to speak with an attorney to find out what affect a bankruptcy will have on these assets. You are only allowed certain exemptions to protect this property and the exemptions offered in Florida are very minimal. If your assets are not protected by an exemption, the asset becomes part of your bankruptcy estate. This means that you either have to turn the asset over to your trustee or pay to the trustee the full value of the asset in order to keep it.
Lastly, please consider what affect filing bankruptcy will have on your future and health. Filing bankruptcy can make getting a credit card, car loan, home loan or lease very difficult for many years. However, how long and what exact affect the bankruptcy will have on your credit depends on where your credit is before you file. You must also consider if you can mentally deal with the decision to file bankruptcy. For some, filing bankruptcy can be very embarrassing and emotionally draining; causing various mental and physical health issues. Filing bankruptcy can also take a toll on a marriage as one spouse may blame the other for causing the bankruptcy, but one important thing to keep in mind is that it is always easier to start with zero debt and build your credit back up than to live with lingering debt and past due payments for years only allowing your debt situation to get worse.
Bottom line, if your debts are more than you can handle first find out every single option available to you. If your only option to is file bankruptcy, speak with an experienced attorney to find out how bankruptcy will affect you, as each situation is different. You may contact the Law Office of David M. Goldman, PLLC today by calling (904) 685-1200 to speak with a bankruptcy attorney.