Is it a Good Idea to Declare Bankruptcy?

If you’re drowning in debt and unable to pay your creditors, bankruptcy may be an option. It could wipe out your debts or reduce them and put you on a payment plan. 

But bankruptcy has long-term repercussions and comes with many caveats and implications. Consider these before making this life-changing decision. Always remember to consult with your Harrisburg bankruptcy lawyer for actual and factual information and advice for declaring bankruptcy. 

The right time to file 

The right time to file for bankruptcy is a personal decision based on the situation of each debtor. However, common indicators include being unable to pay bills on time and receiving collection calls or letters from creditors. 

The timing of when you declare bankruptcy can be critical for your financial future. For instance, if you are considering Chapter 7 bankruptcy and own property that exceeds your state’s exemption limit (property valued at less than the maximum allows you to keep it), waiting a few months to file could result in your property depreciating enough to fall within an exemption. 

When you file for bankruptcy, the court trustee is going to scrutinize your assets and liabilities (aka what you own and what you owe) in order to determine whether to liquidate or sell nonexempt property to pay off creditors. This process requires you to disclose all sorts of information, including bank statements, tax returns, pay stubs and other financial paperwork. 

The right lawyer 

If you decide that bankruptcy is right for you, make sure that you work with a qualified lawyer. Bankruptcy is a complex legal process that can have long-term effects on your credit. 

Before filing, you should compile financial documents such as debts, assets, income and expenses. This information will help you determine which type of bankruptcy to file, and it will give anyone helping you — including the trustee assigned to your case — a clear picture of your situation. 

When choosing a bankruptcy attorney, look for someone with a high Martindale Hubbell rating. This site provides peer ratings and reviews, but it’s also a good idea to check with your local or state bar association for information about attorneys in your area. You can also check out online resources such as Upsolve, which helps people who don’t have the money to hire a lawyer file for bankruptcy. The app walks you through the process and prepares your forms for filing with the court. 

The right plan 

When you file for bankruptcy, you need to have a plan. You have to be completely honest about your assets and income and disclose everything, including any money you’ve received from family members or friends in the past six months, property

that is owed to you or that you’re trying to hide, life insurance policies, current monthly expenses, your home address and the names of any cosigners on your debts. 

It’s also a good idea to create a budget so you can see exactly how much you’re spending and what your available cash is. If you’re having trouble making ends meet, a financial coach may be able to help you find solutions that can save your credit and keep you out of bankruptcy. 

Bankruptcy isn’t something you should take lightly and it has serious long-term consequences. Before you decide to declare, consult a MNP LTD Licensed Insolvency Trustee about alternative debt relief options that may be a better fit for your financial situation. 

The right decision 

Although bankruptcy can help people and businesses get back on their feet, it is a major decision that comes with a long list of repercussions and implications. It should be considered as a last resort only after all other options have been explored and found to be unworkable. In addition, a qualified bankruptcy attorney can assist you in evaluating whether or not this is the right option for your unique situation. 

Bankruptcy gives individuals and businesses relief from insurmountable debt and a chance to make a fresh start. It also provides protection from creditor legal actions and lets you develop a plan to repay all or some of your debt. A lawyer will help you choose the right type of bankruptcy and guide you through the process from filing to discharge. They will also help you understand the complex means test and its effect on your bankruptcy case. Moreover, they will ensure that all required information is provided to the court to avoid any missteps that could jeopardize your case.