Should I Consider Declaring Bankruptcy?

debt bag

If you’re struggling financially, you are not alone. The number of bankruptcy filings across the United States has increased steadily over the past 100 years.

For many consumers, bankruptcy offers a fresh start by discharging all kinds of debts, thereby providing a clean slate. That doesn’t mean, however, that it’s the right approach for everyone who cannot make ends meet.

Whether you’re a good candidate for the proceedings will ultimately depend on your circumstances, including the kinds of debt you need to discharge and their total amounts. There are a few generalities, though, that apply to most consumers.

If you can answer yes to any of the following questions, it’s worth reaching out to a bankruptcy attorney to see whether filing a petition could help your situation:

  • Are your wages being garnished?
  • Have creditors started suing you for repayment?
  • Have you fallen behind on your mortgage?
  • Have you fallen behind on your car payments?
  • Are you only able to meet the minimum monthly obligations on your various debts?
  • Do you borrow money from one lender to pay back another?
  • Are you being harassed by bill collectors?
  • Are you living from paycheck to paycheck?

Will I Lose Everything If I Proceed with Bankruptcy?

Despite facing an overwhelming amount of debt, people are often wary of declaring bankruptcy because they fear they’ll lose everything. It’s important to remember, however, that the purpose of bankruptcy is to provide a clean slate so you can regain your financial footing.

There are two primary kinds of consumer bankruptcy—chapter 7 and chapter 13—and both aim to help petitioners get back on their feet. While the chapter 7 proceedings may demand the liquidation of nonexempt assets like luxury vehicles, vacation homes, and valuable collections, it won’t leave you without the essentials.

Chapter 13 offers a bit more leeway when it comes to retaining your assets. Instead of liquidating your property, this approach calls for a three- to five-year repayment plan. Any applicable debts that remain after you’ve completed the plan are then discharged.

Are There Any Debts That Bankruptcy Won’t Discharge?

While there are exceptions for those in dire financial straits, you generally cannot discharge student loans through bankruptcy. Income tax debts are also difficult to eliminate.  

Additionally, debts that are typically never dischargeable include:

  • Past due child support obligations;
  • Past due alimony obligations;
  • Tax liens;
  • Judgements for willful and malicious personal injury;
  • Judgements for death or personal injury caused by impaired driving; and
  • HOA or condominium fees.

Discuss Your Case with a Bankruptcy Lawyer in Jackson

To find out if you’re a good candidate for bankruptcy, turn to Brown Bass & Jeter, PLLC. Backed by decades of experience in the legal field, our compassionate team won’t judge you for your financial situation. We will evaluate it from all angles to help you determine how best to proceed so you can achieve both your short- and long-term goals. Call 601-487-8448 or fill out our Contact Form to schedule a free consultation with a bankruptcy attorney in Jackson.

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