Financial Trouble? Discuss Your Options With A Bankruptcy Attorney

The economic woes with the long term recession resulted in a 32 percent increase in bankruptcy filings in 2009 from 2008 filings

. The high unemployment rate and housing crisis have prompted greater bankruptcy declarations from people with high education levels and higher income being forced into unsustainable financial situations. Those who have lost jobs and have been unable to find employment at comparable compensation packages are in the position of making difficult decisions they never thought they would face.

Choosing bankruptcy is never an easy decision to make. Though it can allow a fresh financial start and prevent a home foreclosure, it does exact a price. A bankruptcy on your credit record will drive your credit score down significantly so you will be unable to get a loan. It will also affect your ability to lease an apartment, get insurance, and it could affect your career and future job options. This make it all the more important to have all the facts available, both the good and bad of bankruptcy, in order to make an informed, wise decision.

Employing the services of a bankruptcy attorney isn't required in order to file successfully but it is highly recommended so you are armed with the information you need and you have an advocate who is knowledgeable of the laws in this specialized field. Errors made in filing can be very costly and irreparable. An experienced bankruptcy attorney can also advise you on the avenue to take that best serves your individual situation.

There are different types of bankruptcy. If you have real property and a verifiable income, Chapter 13 bankruptcy offers the opportunity to pay the debt down with an interest-free payment plan as outlined by the court over a three to five year period. This enables you to keep your property and protect it from foreclosure. It does not discharge debt but restructures it to make it possible to repay.

If you qualify for Chapter 7 bankruptcy, unsecured debt is discharged for a "fresh start." This includes credit cards, utility bills, medical debt, and any other debt that is not secured by collateral. It does not discharge obligations such as child support or student loans. To qualify, you must earn less income than the average in your state for a family of your size.

Every situation is different and the laws are complex. If you are being swallowed by debt that you are unable to repay and you are being harassed by creditors, talk to a bankruptcy attorney to find out your options.

by: Art Gib

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