Bankruptcy is often the choice that many people lean towards when they are severely and overwhelmingly in debt. Bankruptcy can be seen as an easy way out of debt issues though it is truly a last resort method to debt freedom. There are pitfalls and downsides to bankruptcy.
Bankruptcy can relieve you from financial debt and obligation, but does come with a price. You do have to pay a bankruptcy attorney, usually a minimum of $200.00. On top of this fee you will have permanent results to your credit report. For the next 10 years, both chapter 7 and chapter 13 bankruptcies appear on your credit report. Eighty percent of all credit reports carry errors that can harm your chance of a home loan, car loan or personal loan. Some employers require a credit report for position consideration. Poor credit reports showing unsatisfactory payment history can keep you from receiving a job. Newspapers will often carry a section releasing bankruptcy information, since bankruptcy is public knowledge. This could lead to embarrassment from friends, family and co-workers.
Though bankruptcy is not a process in which a person should be ashamed society does often frown upon it. With pitfalls being attached to bankruptcy a better choice perhaps may be debt consolidation. You can have all of your credit cars and unsecured debts consolidated into one easy monthly payment. You can pay down your debts and regain control over your finances. The choice is up to each individual and decisions vary upon the situation. It is best to speak to both a debt counselor and a bankruptcy attorney to see whether or not the pitfalls of bankruptcy are worth the while.
You do have the option of filing for bankruptcy yourself if it is unavoidable. This can save the time and money you would normally spend on a lawyer who would proceed with your claim. It has been said that a person who represents himself at court has a fool for a client. Yet with the many do-it-yourself legal kits that are available for purchase from office supply stores and via the Internet, those with a straightforward legal case may be able to save the money they would otherwise have to pay a lawyer and simply apply to meeting their personal needs.
Keep in mind that a do-it-yourself bankruptcy is easy to do if you do not have a plethora of fiscal assets and instead your financial portfolio consists mostly of debts. Yet at the same time there are some drawbacks to going it alone and prior to deciding on a course of action, decide if the do-it-yourself option is really for you!
Filling out the forms is probably the easiest part. Taking them to the courthouse, having them date stamped, and paying the filing fee is also a task that can be easily done by you. Yet where it gets tricky is the burden of informing creditors of your filing – you need to be able to document that you followed all of the requirements set forth by the state with respect to your filing – and also preparing to potentially defend your assertion that you do not have the funds needed to pay your obligations against a creditor.
If something changes and you want to include a previously excluded debt, there are also provisions that must be met and you need to ensure that you are able to meet each of these head on to avoid any penalties for filing late. In the same vein, any communication from the court must be immediately read and responded to, and sometimes the legalese is hard to understand. The clerks of the court cannot give legal advice and you may find yourself putting in quite a bit of time in front of the computer doing legal research.
If none of these deter you, then a do-it-yourself bankruptcy kit might be the way to go for you!