New data shows that 2010 was marked by more personal bankruptcies than any other year since stricter federal bankruptcy laws were enacted in 2005. Roughly 1.53 million consumer bankruptcy petitions were filed in 2010, up 9 percent from 1.41 million in 2009, according to the American Bankruptcy Institute, citing data from the National Bankruptcy Research Center.
What’s more, this five-year high in the number of U.S. consumers seeking bankruptcy protections could rise even higher as other Americans continue to drown in debts accumulated during the economic meltdown.
With so many average Americans seeking the safe havens of a bankruptcy petition, you may be wondering, “should I file?” While the answer always depends on the details of your individual financial situation, there are a few traditional factors in your situation that can (and should) point you to the reasonableness of your decision to file or not to file.
Ultimately, before you file, it’s essential to understand the advantages:
The Essence of Bankruptcy is Debt Discharge
The most basic advantage of a personal bankruptcy is the discharge of an unmanageable debt-load. Following a bankruptcy discharge, all creditors are barred from seeking your discharged debts. In short, debt disappears and allows you begin down the road to a better financial future. If you have mounting debts—credit card, medical bills, or otherwise—bankruptcy can be a proven debt dissolution solution. Consider it.
Protection from Creditor Harassment
If you have debts, especially debts you cannot afford to pay, you understand better than anyone that creditors will come calling (quite literally) to assert their claims against you. A bankruptcy filing means your creditors are automatically stayed (i.e., “stopped”) from pursuing their claims outside of the bankruptcy process. At the same time, this ends creditor calls, letters and visits that can border on harassment during the collection process.
Chance to Bring Your Debts to Bare
Despite any contract terms or prior processes to the contrary, Chapter 13 bankruptcy plans provide you with the time to make arrearages current while, at the same time, allowing you to hold on to property and the good status of a loan. This can be important to debtors attempting to hold onto homes or non-exempt property that would otherwise be jeopardized by a Chapter 7 filing.
Allows for Debt Modification
In some cases, Chapter 13 bankruptcy can also allow you to modify the preexisting terms of a contract for debt by either reducing the amount owed or changing the timing of payments. This provides a lifeline to many men and women suffering with mounting debt despite a source of steady income that, with a little assistance from the bankruptcy court, can return them to a better financial position.
Protecting Your Property From Creditors
In this era of foreclosures, protecting property is often at the forefront of people’s minds. Bankruptcy allows for certain “exempt” property that can be protected from creditor claims, sometimes even removing liens from exempt property so you can own it outright after your bankruptcy case is closed.
While there are some challenges in the bankruptcy process, including the possibility of retaining some debts, possible loss of non-exempt property, and a negative impact on credit scores, bankruptcy has become a safety net for millions of people facing their own financial crisis in the wake of the recent recession. So, before making any decisions about your debt dissolution options, make sure to take advantage of the free consultation from a competent bankruptcy lawyer.
A qualified bankruptcy attorney is what you’ll want during the bankruptcy process to work in your best interests, regardless of what type of bankruptcy you choose. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation. Just call toll free to +1-919-646-2654, or make your own appointment online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button TODAY for a better 2011 and beyond.