In 2014, 936,795 people filed for bankruptcy in the United States. Surprisingly, this is a 12.5 percent drop from 2013. However, it is still four times higher than the number filed in 1980.
There are times in which personal bankruptcy is necessary; however, it does not come without consequences and should be considered as a last resort. It is effective for wiping out a lot of debt obligations, but it can negatively affect your credit and your ability to borrow money in the future.
A bankruptcy will remain on your credit report for at least seven to ten years depending on the chapter you file. Whether someone is considering filing chapter 7, 11 or 13, all federal rules and regulations must be followed. Missing any important steps along the way could cause the bankruptcy to fall through and the court system to refuse the release of the debtor’s liabilities.
Many experts believe that unless someone is at least $15,000 in debt, it is not necessary to consider bankruptcy. Bankruptcy can prevent or delay the foreclosure of a home or car repossession. It can also prevent wage garnishment and curtail the legal actions of creditors attempting to collect debt. In contrast, it typically cannot put an end to payments such as alimony or child support. It also cannot stop debt from accumulating during the filing of bankruptcy or some debts accumulated within six months of declaring bankruptcy.
Bankruptcy is a legal proceeding that is beneficial for some people to help maintain a fresh financial start and prevent debtors from collecting. Before you press forward in a bankruptcy filing, seek legal advice and make certain that it is your last resort.
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