When most people think about bankruptcy, they think about the financial stress it can cause. However, what many people don’t know is that bankruptcy can also improve your mental state by relieving the financial stress you’re under. Does filing for bankruptcy have a negative stigma to it in the public eye? Unfortunately, the answer is a resounding yes it does. The crazy thing is that the reality is the complete and polar opposite. In fact, the financial stress that unpaid taxes, credit card debt and even mortage arrears can create, creates a far worse mental state than receiving a discharge of your debt, with a small mark against it on your credit report.
bankruptcy can be a difficult decision to make, but it can also provide relief from the stress of debt. When you file for bankruptcy, you are giving yourself a fresh start and a new chance to rebuild your financial life. Bankruptcy can improve your mental state by freeing you from the worry and stress of debt and allowing you to focus on more important things in life.
Should I declare bankruptcy?
Whether you are filing for bankruptcy due to medical expenses, job loss, getting a divorce, stopping a foreclosure or just trying to get out from under a mountain of credit card debt and other financial difficulties, declaring bankruptcy can be a daunting process. It is important to remember that filing for bankruptcy does not automatically mean that your assets will be liquidated and that you will lose everything. In many cases
Can you file for bankruptcy and still have money?
In most cases where an individual has assets that they’re able generate some cash flow, or is a high-income earner, they can file a Chapter 13 bankruptcy, where they make a reasonable payment each month for up to 60 months. You will not be required to liquidate everything you own, nor pay every penny you earn to the bankruptcy trustee. However, if you have a significant income, it’s important to know the difference between Chapter 7 and 13 bankruptcy.
There is an objective test called the means test, which measures your household income against the median income in your state for your family size.
Are any debts not discharged in bankruptcy?
While bankruptcy erases your financial liabilities, it does not terminate all of them. Some debts are non-dischargeable, such as child support and personal taxes paid less than three years ago. The bankruptcy court decides whether certain obligations can be discharged in your chapter 7 or Chapter 13 case, including most student loans and debts incurred through fraud. The bankruptcy code outlines which of these types of debts can and not be wiped out. Prior to filing bankruptcy, you should consult with a bankruptcy attorney, who can advise you on how a bankruptcy judge might rule under Federal law.
Are there other types of debt relief I should consider before a bankruptcy filing?
In addition to filing for bankruptcy, you may also want to explore other types of debt relief such as debt consolidation, credit counseling or a repayment plan with your creditors. This will help you determine whether filing for bankruptcy is the best decision for you and your family’s financial situation. But if you are facing overwhelming financial stress from unpaid debts and financial obligations, filing for bankruptcy can provide much-needed relief and a fresh start. With the right guidance, filing for bankruptcy in Maryland can be an empowering experience that allows you to build a better future for yourself and your loved ones.
How to file for bankruptcy
The first step in seeking a bankruptcy discharge is to take a credit counseling and debtor education course, which is a prerequisite to starting the bankruptcy process. The next step is to start gathering all of your financial documents including your credit report, paystubs, tax returns, medical bills, bank statements and other documents that identify your income, debts, expenses and what few assets you have. Once you have gathered that, you should meet with a licensed bankruptcy lawyer in your area to go over potential bankruptcy case and whether you can seek bankruptcy protection from your creditors. A bankruptcy lawyer can help you decide if it is best to try to partially repay debts you owe, engage in debt settlement negotiations with your creditors or file bankruptcy. Some of the key things to consider is whether you have any non exempt property, that would be liquidated, a car loan or mortage that you are behind on payments, or any type of judgement for fraud or domestic support obligations.
If you make the decision to initiate bankruptcy proceedings, you will need to draft a bankruptcy petition and complete the required bankruptcy forms to file with the federal court.
After filing for bankruptcy, you will have to attend a hearing before a bankruptcy trustee and explain your financial situation. If approved, the bankruptcy court will issue an order of discharge and close your case. This process can take several months to complete, so it is important to seek legal guidance as soon as possible. To learn more about filing for bankruptcy in Maryland and how it can help relieve financial stress, consult with a bankruptcy attorney near Greenbelt today.
