Is Bankruptcy the Ideal Solution for your Financial Situation?

by | Feb 14, 2013 | Law

While any individual is allowed by law to file for bankruptcy in Long Beach, it is an option that has to be given serious consideration. It is not a decision that can be taken haphazardly just because you want to put an end to all the harassment coming from creditors. While it can certainly be stressing having to face the incessant calls of collection agencies and bill collectors not to mention their threats of litigation, repossession, foreclosure or garnishments, it remains important to consider that there are other debt relief programs that can be undertaken.

Importance of proper knowledge of bankruptcy laws

Before considering filing for Bankruptcy it is important to evaluate your current financial position whether you will pass the “means test.” Consulting with a bankruptcy lawyer allows you the benefit of understanding the complex bankruptcy laws which have been recently modified to prevent abuses. Accuracy is very important in the process as well as honesty in listing down all the assets since any errors in the application including supporting documents may result in dismissal. There is no minimum amount of debts necessary to be able to file for bankruptcy. What seems more important for the courts is your ability to pay for the loans in the near future or if you face loss of property due to the actions that will be made by creditors to collect any outstanding debts.

Considering future consequences of bankruptcy

Filing for bankruptcy certainly sounds appealing as it will put a stop to all collection actions instigated by creditors; however, there are also drawbacks in filing bankruptcy. It is a record that stays in your credit history for at least 10 years. This can negatively affect your future when you require car financing or loans from financial institutions. A low credit score means you have to pay for higher premiums for car insurance. While bankruptcy does not have a direct effect on your present employment, it may be an issue in the future especially if you are considering job opportunities in the financial sector.

While bankruptcy has become a typical scenario among many people today, there remains a social stigma attached to bankruptcy. The actual details of your application for bankruptcy in Long Beach area may not be publicized but it does not prevent gossip within your social circle. It can be surprising but word does get around and sooner or later almost all your friends will know about your financial circumstances. However, this is a small inconvenience compared to the debt-free life you can attain after filing bankruptcy. You no longer have to shudder in fear every time the phone rings or someone knocks on the front door.

Eligibility for bankruptcy is determined by the courts which require proof of income, bank statements and collection letters including tax returns. The process requires overwhelming paperwork and failure to provide all the pertinent documents can result in dismissal. Lawyer’s fees may add to your expenses but you can be very sure of the accuracy and preciseness of your application to increase the potential for approval if you have one on your side.

Filing bankruptcy in Long Beach may or may not be the solution for your financial predicament. It is important to make careful consideration of all factors whether bankruptcy is ideal for you.

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