Debt Relief: The Pros and Cons of Filing for Bankruptcy

Debt Relief: The Pros and Cons of Filing for Bankruptcy

There are people that view bankruptcy as one of the easiest ways out of a tough financial situation. While it is true that the bankruptcy offers you a financial fresh start, it also comes with its own set of legal and personal implications. Before you decide to file for either chapter 7 or chapter 13 bankruptcy, there are several things that you have to know about Debt Relief.

Why people file for bankruptcy

People file for bankruptcy to get some sort of relief from stressful financial situations. Here are a few of those situations.

*    Saving a house or other real estate property from imminent foreclosure

   Preventing creditors from suing the debtor or auctioning off personal property to get back what they are owed.

   To get more time to organize one’s financial affairs and pay off their debts, as in the case of chapter 13 filing.

   Protecting oneself from legal action from employees in case of a business that has become insolvent.

These are just a few of the reasons people choose to file for bankruptcy.

Why most petitions are turned down

For the process of bankruptcy filing to be successful, a person will have to file a petition with a federal law court. However, there are some common mistakes that people make jeopardizing the success of the whole process. Here are some of the mistakes:

*    Failing to list all assets and liabilities. This is at times seen by the authorities as an attempt at defrauding them.

   Trying to transfer some of the personal property to friends to have them exempted from the process

    Failing to attend the hearings

   Giving inconsistent information about the creditors and the amount of money that you owe them

*    Trying to file a petition less than 180 days after a failed attempt

These are the things that make it very necessary to hire a bankruptcy lawyer in the process of getting Debt Relief. The attorney will look at your financial situation and advise you about the most appropriate relief type to file for. They will also guide you towards ensuring that your plea doesn’t get rejected.

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