Claiming bankruptcy is by no means an easy act. It is perhaps one of the most crucial decisions of your life and can have an immense bearing on your future and that of your family. The decision must be carefully taken taking into consideration its financial and social repercussions.
One of the advantages of claiming bankruptcy is that it usually puts an end to those harassing calls and visits from creditors and money lenders. But that does not mean that claiming bankruptcy you can get away with your debts. There are different chapters under which you can file for bankruptcy under the US laws.
Filing under Chapter 7 allows the court to proceed with the complete liquidation of your assets. A major portion of this goes towards clearing off the debts of your creditors. The court normally reserves a small portion of the assets for the affected party to help them make a new start in life.
If you file for bankruptcy under chapter 13, then you will be given an option to repay your creditors over a period of time. The court will appoint a receiver who will be in complete control over your assets and incomes. The receiver will personally manage the repayment procedure as per decided schedules.
Filing for bankruptcy can affect various aspects of your life. Apart from causing a huge dent to your reputation, it also affects your credit ratings for a long period. You can be forced to live a lifestyle of several notches below your usual standards. This can affect family ties and put a huge question mark over the future of your children.
Bankruptcy laws are at a slight variance in different states. While some states allow you to retain your home and vehicle, others sell off everything of value to clear off the debts of lenders. If you do not have a mortgage or loan on your home and car, there is a chance that you can get them back from the courts.
Another aspect that you must remember is that filing for bankruptcy is an expensive exercise. Since the filing process is intricate you cannot do without the services of a bankruptcy lawyer. Filing it yourself can result in an inordinate delay as there are many documents to be filed and forms to be filled.
Lawyers charge you by the hour in a bankruptcy case. If you have the cash to hire a lawyer, that is the best option. They can take care of all the hassles related to filing and documentation. In any case, before you make the final decision it is better to look at the options available.