How will filing bankruptcy help me?
Filing bankruptcy should not be taken lightly. It is a last resort during financially difficult times that will allow you to not have to pay most of your debts if you qualify for a Chapter 7 discharge. This includes credit card debts, car loans, mortgage or other types of personal loans. If you are able to afford payments then you may be able to discharge credit card bills but keep your home and car.
The main exceptions to discharge, which means that the debts that have to paid regardless of whether you file bankruptcy are student loans, taxes and other government debts and payments arising by court order, such as family court support and criminal restitution.
Filing bankruptcy might also be the safer alternative to having bad credit and negatively affecting your employment and financial qualifications. This might damage your credit at first but is the first step toward restoring and repairing your credit.
November 15th, 2010 at 8:19 am
Good article. There are a number of misconceptions of how filing a bankruptcy and also the release of ones debts will influence every consumer. Allow me to dispel the most typical misinformation about personal bankruptcy. If you cannot pay your debts, are receiving telephone calls from collectors demanding payment or are dealing with a lawsuit, bankruptcy may help you. One of the major aims of bankruptcy law is to give a financially distressed person an opportunity to make a new financial start. Filing bankruptcy generally results in the “discharge,” or release from obligation, of your debts — or at least of many of them — so that no further legal action can ever be taken against you on those debts. In short, bankruptcy gives you a fresh start. However, careful consideration should be given before filing for bankruptcy, because doing so may affect your credit and have other adverse consequences.
Note that if you are “judgment proof,” bankruptcy would not be helpful. If you have only a few assets of minimal value; if your income is from unemployment, welfare or some other type of government benefits; or if your wages are low enough, you may be judgment proof; even if your creditors file suit against you and obtain judgments, they cannot take any of your property or garnish your income. This is because Oregon law provides that certain property and income of a debtor is exempt from the claims of creditors, even if the creditors have obtained judgments. As described earlier, your automobile cannot be taken if it is worth less than $2,150. Welfare, unemployment and certain other government benefits cannot be garnished. If you earn net wages of less than $170 per week, your wages cannot be garnished.
There are a number of factors to consider in deciding whether bankruptcy is an appropriate option. You may wish to consult an attorney before proceeding to file for bankruptcy.