According to a law review posted this year, the longer an individual delays in filing bankruptcy the more difficult it gets. This not only damages the person financially, but it affects his or her well-being or health. Once debt becomes unmanageable and assets start depleting, lawsuits for debt collection start piling up and people become unable to afford basic necessities. For this reason, it is important to understand the right time to file for bakruptcy.
TechShop, a membership-based communal workspace for artists, designers, and tinkerers with locations across the United States and abroad, abruptly closed its doors in November of 2017. Along with this closure came an announcement that the company filed for Chapter 7 bankruptcy. All locations in the United States closed, while those outside the country remain in operation.
There is no limit to the number of times you can file for bankruptcy. When your personal debt amount reaches a level where it is impossible for you to pay it down yourself, Chapter 7 and Chapter 13 bankruptcy are there for you to use to have your debts discharged under court supervision. If you have completed a bankruptcy case before, you know that it can be a difficult process that requires you to cede a significant amount of control to the court.
Chapter 7 bankruptcy is often called “liquidation bankruptcy” because it involves the liquidation of the filer’s nonexempt assets to satisfy his or her debts. Certain classes of assets are exempt from liquidation, which means that the filer’s bankruptcy attorney cannot sell them to recover liquid cash to satisfy the filer’s debts.
If you are struggling with an intense level of personal debt, consider filing for bankruptcy. Individuals in this situation can file for Chapter 13 or Chapter 7 bankruptcy, depending on the chapter for which they qualify. Often, it is easier to qualify for Chapter 13 bankruptcy, but this is not always the case.
Consider Chapter 7 Bankruptcy
When you are struggling with an uncontrollable level of personal debt, filing for bankruptcy is not an ideal outcome. However, it is sometimes the best outcome for your situation because it allows you to make the lifestyle changes you need to make to regain control over your finances and negotiate a fair settlement with your creditors. Whether you file for Chapter 7 or Chapter 13 bankruptcy, you will work closely with the court to ensure that your rights are protected and your debts are paid.
Filing for bankruptcy could be one of the best decisions you ever make, but it is a decision that has consequences and should not be taken lightly. In fact, bankruptcy might not be the right choice for you, depending on your circumstances. Before making any drastic decisions about how to manage your debt, consult with an experienced bankruptcy attorney.
Keep these long-term consequences in mind as you learn more about the topic.
Bankruptcy Stays on Your Credit Report for Years
Although each bankruptcy case is unique, every filer must eventually decide which bankruptcy chapter is best for their particular situation. Chapter 7 and chapter 13 are the most popular forms, each offering different bankruptcy options. The American Bar provides a detailed comparison.
Debt is a familiar reality to many Americans. However, contrary to popular perception, debt is not inherently bad. When people understand how to manage debt responsibly, they can improve their credit score and acquire loans. Responsible debtors have more opportunity when it comes to buying a home or starting a business. Unfortunately, unexpected circumstances can put debtors in a position where they cannot make payments. An injury or a natural disaster, for example, can produce steep expenses, and in these cases, one viable option may be filing bankruptcy.