Bankruptcy can be a wonderful tool for escaping insurmountable debt, slowly righting your credit score, and stopping a barrage of collections efforts. However, it is important to enter the process of filing for bankruptcy with a clear and complete understanding of the effects these proceedings will have on your life, both in the short and long term. An inventory of assets should be taken, and a careful analysis to determine which form of bankruptcy would best serve your current interests conducted. These analyses are best conducted by a knowledgeable attorney who is aware of all relevant factors and can provide you with advice suited to your unique situation. Bankruptcy is not to be undertaken lightly.
Depending on the form of bankruptcy you choose, it could continue to impact your monthly budget for years to come. Debt relief through bankruptcy can be had, but the process should be supervised by a skilled attorney.
What You Should Know Before Initiating Bankruptcy Proceedings
It is important to perform an honest assessment of how bankruptcy may affect you as compared to continuing as you are. Questions to ask include:
- Which type of bankruptcy is best for me? – There are generally two types of bankruptcy for private debtors, Chapter 7 and Chapter 13. Chapter 7 involves a liquidation of your assets but provides a more expedient path to debt relief. Chapter 13 does not mandate a liquidation of your assets, but you would need to continue making payments roughly equal to your disposable income for several years.
- Is there another path to debt relief? – Some individuals, particularly those with one high-dollar debt such as a surprise medical bill, find that they are able to begin a reasonable payment plan that while unlikely to terminate in the foreseeable future, ultimately keeps their accounts from going into collections.
- What assets and debts do I have? – A detailed inventory of your total assets and total debts should be undertaken. This inventory can give you a better understanding of your complete financial situation and guide your decision-making.
- Which assets would be protected from liquidation? – The liquidation requirement of Chapter 7 bankruptcy tends to be disturbing to people contemplating bankruptcy. However, an enumerated list of assets is generally guarded against liquidation.
These are only a few of the questions you should have answers to before initiating bankruptcy. An attorney can help ensure that you have made the proper inquiries before filing for bankruptcy.
Contact a Kane County Bankruptcy Lawyer
DLAW, PC can work with you to determine whether bankruptcy is in your best interests and if so, which type. Our skilled Geneva bankruptcy attorneys can guide you through the process so that you can escape debt that has become unmanageable. Call 331-222-7978 for a free consultation.