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Will bankruptcy help?

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Updated: 4/13/2007 6:35 pm
Whether or not bankruptcy may help you is dependent on the financial problems you’re hoping to solve. Generally, if you’re having problems fulfilling your student loan or tax obligation, there may be better ways to help you than bankruptcy. On the other hand, if you’re deep in debt from excessive credit card use or have tons of unpaid medical or legal bills and you’re finding it hard to regain your financial strength because creditors are constantly asking you for money you don’t have, then bankruptcy can provide much needed relief. It can release you from your legal obligation to pay most or all of your debts, thereby giving you a clean financial start, or to help you reorganize your financial obligations to a more affordable level. Bankruptcy will also stop any legal actions against you from creditors such as foreclosure, repossession, wage garnishment, lawsuits, and debt collection harassment. You’ll usually be able to keep certain property as well, such as a house or car, if it’s deemed a necessity for day-to-day living. There are drawbacks, of course, to filing bankruptcy. Mainly, it can ruin your credit for up 10 years, resulting in the loss of valuable assets, and affecting your purchasing power and your ability to receive new loans in the future. Generally, though, if the benefits of bankruptcy far outweigh the obstacles that it can create for you, then it might be the best option you have to help you deal with your financial troubles. It’s important to remember, though, that bankruptcy is designed to assist honest, financially distressed people to get back on their feet. It’s not designed to help you if you just don’t want to pay your bills. If the bankruptcy court sees that you have sufficient income to take care of your debts, your bankruptcy petition will be denied.
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