Those who are going through financial distress, may be tempted to do anything to feel less pressure. A person may have significant debt and not enough money left over at the end of each month to slowly pay it off. So, a person may eventually wonder what filing for bankruptcy entails and whether this decision can get them on the route to financial stability. An attorney suggests not taking this decision lightly and to seek legal advice before submitting any paperwork.
Don’t Rush into Bankruptcy
The truth is, bankruptcy is often a long, hard road that can impact credit scores and other financial opportunities for the future. Filing for bankruptcy doesn’t always mean a person’s debts will be eradicated entirely either. There may be limitations for how much and what types of debts can be eliminated. Many people rush into bankruptcy before weighing the pros and cons because they are having a difficult time dealing with their current financial hardships.
In some cases, a person can benefit from filing immediately. But this depends on their personal circumstances. If you are in desperate need of a solution, please contact an attorney for more information.
Pause Before Using Retirement Funds
In general, most retirement funds are protected in bankruptcy. A tragic mistake many people may make, is withdrawing funds from a retirement account to pay off debts that filing for bankruptcy would have wiped out. Before using your retirement in this way, consider whether bankruptcy could prevent you from having to do so. You may find that filing for bankruptcy enables you to keep your retirement while also working towards a more secure financial situation.
Be Honest When Applying
What you write on your bankruptcy paperwork can be used against you under penalty of perjury if you are found lying about your income, expenses, assets, debts, and other financial details. If you intentionally misrepresented information, you could face criminal penalties, hefty fines in the hundreds of thousands of dollars, and/or prison time. An attorney can review your application before submittal, to see that no errors have been made.
How Bankruptcy Can Help You
Bankruptcy can be useful in several ways. It is possible for a person to eliminate at least some of their debts, so it makes paying off the rest more manageable. Once a person files for bankruptcy, automatic stay goes into effect — which means creditors are no longer able to make collection attempts. Pestering phone calls from creditors often makes people even more stressed, so getting a break from these messages allows space while getting back onto their feet financially.
If you are struggling with finances and aren’t sure where to turn, you can rely on an attorney for the support you need. They can advise you as to whether you can reap the benefits of applying for bankruptcy, before committing to the entire process. Your attorney can imagine the pressure you may be under. Please let a law firm help by calling right away, before your outstanding bills continue to mount even higher.