Common Bankruptcy Questions Answered

For those that have been unfortunate enough to fall behind in their debts, it can easily seem as though there is no way to escape this situation. Luckily, bankruptcy can offer you important protections and the chance to enjoy a fresh financial start. Unfortunately, if you are relatively uninformed about this legal protection, you may not fully understand this type of protection, which means that you may benefit from learning the following couple of questions and answers.

Why Should You File Bankruptcy Instead Of Ignoring The Debts?

There is a common belief among some people that a bankruptcy filing can be an irreparable blemish on their credit histories. As a result, these individuals may assume that that it is better to simply have reports from creditors on their credit histories than a bankruptcy. However, you should be aware that creditors can do more than simply damage your credit history. They can also take aggressive action to compel you to settle your debts. For example, it can be possible for a creditor to obtain a lien against your home. In this situation, your house can be foreclosed if you do not settle the debt that led to the lien. Additionally, it can also be possible for creditors to garnish your wages, which can make it more difficult for you to effectively manage your debts. By filing for bankruptcy, you can help to stop these outcomes. While there will be a record of the bankruptcy on your credit history, it will be possible for you to minimize the importance of this mark on your credit by making sure to stay current on any bills that you have following your bankruptcy.

Can You File For Bankruptcy If You Have A Good Paying Job?

Sadly, some individuals may not seriously consider filing for bankruptcy because they may assume that they do not qualify for it because they are employed in a good paying job. Fortunately, you should be relieved to learn that you may still be eligible to file for bankruptcy. In fact, you may be able to avoid liquidation of your assets by filing for a Chapter 13 bankruptcy. Under this bankruptcies, the courts will work with your creditors to renegotiate the terms of your debts. This can allow you to secure more favorable repayment plan. While you will still need to make regular payments under this type of bankruptcy, it can be an effective way of preserving your assets while enjoying the protections of bankruptcy.

Contact a local bankruptcy attorney, like those at Hornthal Riley Ellis & Maland LLP and similar firms, for more answers and information.