Is Filing Bankruptcy Bad? Can It Be Good? – National Bankruptcy Forum

You ’ ll hear a lot of people conclusively say : “ bankruptcy is bad. ”
But why ?
Why is the general consensus that filing for bankruptcy is a bad thing ? While it is true that filing for bankruptcy is testify of fuss with personal finances, that ’ s not the whole floor .
A big part of the reason why people say bankruptcy is bad is because they don ’ deoxythymidine monophosphate understand the process. No two bankruptcy cases are alike and consumers are forced into bankruptcy for a whole host of different reasons, most of which are beyond their operate.

The country presently finds itself staring a recession in the boldness because of an unanticipated ball-shaped pandemic called the coronavirus, or COVID-19. Most people who suffer financially because of this virus do so because of bad fortune, not necessarily because of poor plan .
Below, we ’ ll go over some of the reasons people file for bankruptcy and how bankruptcy can sometimes be a thoroughly matter — if it ’ s right for you and your kin .

Unforeseen life events can cause bankruptcy

If you can afford to pay off debt and file for bankruptcy alternatively, possibly you ’ ve made a poor decision. similarly, person filing for bankruptcy with bad intentions or to defraud creditors is behaving ill and cheating the system .
In a case like this, the peanut gallery would be compensate : This type of bankruptcy is bad. But what about the family forced into bankruptcy after the breadwinner loses a job ? What about the family who incurs enormous aesculapian bills based on an unanticipated car accident ? What about the ex-wife in a community property state who is left holding the cup of tea on thousands of dollars of accredit card bills charged by her ex-husband without her cognition ?
In these cases, bankruptcy can provide fantastic relief and an opportunity to start over. It ’ randomness slowly for person who hasn ’ triiodothyronine experienced hardship to say that bankruptcy is bad, but lecture is brassy and people have families to take care of .
See also: Bankruptcy Exemptions : What Can I Keep ?

Why the bad reputation?

Filing for bankruptcy has a badly reputation in many circles due to the fact that it damages your credit and involves discharging debts that will likely never be repaid. sure, Chapter 7 bankruptcy international relations and security network ’ t great for your credit mark and will appear as a public record for 10 years after filing. however, most consumers who file for bankruptcy have already had their credit rating damaged by a series of recently payments.

Whether your bankruptcy filing can be labeled as “ bad ” is in truth a function of whether you intend to defraud the arrangement or whether you have a moral obligation to pay debts that you plan to discharge in bankruptcy. There are many types of debts that are eliminated by filing for bankruptcy. For model, possibly your primary debts are a $ 50,000 recognition card balance and a $ 10,000 personal loan that you owe to your brother that he loaned to you while he was having fiscal problems of his own. If you file for bankruptcy, both the recognition batting order debt american samoa well as the debt to your brother will be eliminated. Filing bankruptcy to discharge credit tease debt at 29 % interest would not be considered “ badly ” by most people .
On the other pass, some would argue that discharging a $ 10,000 debt to your brother might not be the right thing to do. even if you fall into this camp, it is authoritative to understand that there is nothing that prevents you from voluntarily paying back the debt after filing for bankruptcy. You could file bankruptcy, discharge your credit circuit board debt and then once you have an opportunity to rebuild, write your brother a crack for what you owe. This does not in any room violate the bankruptcy laws. For this reason, whether bankruptcy can be construed as bad is very a officiate of context .
See also: How to Screw Up Your Bankruptcy Discharge

When is bankruptcy a good idea? The answer depends on your situation

Bankruptcy is not inherently badly or estimable, but it is an important security for honest consumers who find themselves in big disturb with debt. A belittled minority of filers try to abuse the bankruptcy process to hide assets and chess creditors. These stories are dwarfed by the stories of honest people who have suffered through sturdy times and ultimately turned to bankruptcy because they can ’ t see a means out. even the Bible calls for debt forgiveness every 8 years .
If you find yourself in a street fighter fiscal military position and can ’ thymine see a means out, fitting with an feel bankruptcy lawyer. The forum has contacts in 50 states — check them out today. Don ’ t let stereotypes stand in the way of getting the relief you and your class necessitate .
You may also be interested in:

Walter Metzen is a Board Certified Specialist in Consumer Bankruptcy with over 28 years of experience. He ’ mho represented more than 20,000 bankruptcy clients in and around Detroit where his firm is located. View his profile here .

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