When filing for a Chapter 7 Bankruptcy, some consumers and entrepreneurs neglect to include certain debt for a variety of reasons. Maybe they feel too embarrassed for a people to know about their financial problems. Some consumers have emotions tied up in some debt they owe. Yet, they want to take responsibility by paying back certain debt when they get a job or receive a windfall in the future.
To avoid bankruptcy remorse or regret, it's important to turn over every stone and include all debt in a Chapter 7 bankruptcy. Also, realize you are not alone. More people turn to bankruptcy relief during hard economic times. A Forbes article points out that, with the latest recession, 30 million people filed for unemployment.
Clearing up your debt with one case makes it easier for you to start over without any lingering financial burdens. Also, it puts all of your creditors on an even playing field with no special treatment for one versus another. In addition, it's your legal responsibility to disclose all of your creditors when filing for bankruptcy. People who file for bankruptcy often get a better grip on their personal finances. By making smart decisions, you will have the chance to buy a home, qualify for a car at a lower interest rate and even use a credit card in the future.
Business owners are also good candidates for bankruptcy relief. According to a recent article by USA Today, no entrepreneur wants to declare bankruptcy but it is often the only prudent decision particularly for those hit hard during a recession.
Knowing what bankruptcy can and can't do
To avoid regret about filing a bankruptcy, talk to your bankruptcy attorney about what is and is not protected. A chapter 7 bankruptcy does wipe out unsecured debt such as credit card debt. It also puts a halt to creditor harassment such as phone calls and letters. But a Chapter 7 bankruptcy can't eliminate liens. A creditor can repossess a vehicle or property in some cases. Bankruptcy does not eliminate your legal obligations to pay child support or alimony debt.
Remembering to list debts in your bankruptcy papers
Debts you forgot or purposely failed to include in your bankruptcy papers are not dischargeable under Chapter 7 or 13 bankruptcy. Other debt that you still have to pay includes traffic tickets and criminal restitution. A good attorney helps fight on your behalf if a creditor claims a specific debt should survive bankruptcy because of fraud. For example, a creditor might claim you lied on a credit application.
Remember that leaving a credit off the bankruptcy form is not a way of being nice to a former creditor if you have the intention of paying them back. The reality is that you file bankruptcy under penalty of perjury. Intentionally failing to include certain creditors is a crime. Approach your bankruptcy filing in good faith. Leaving a secured creditor off your creditor list has serious consequences as you could face collection down the road. After going through the process, hold firm to your resolution to manage money. Stay strong to overcome any obstacles in your path.
At Law Offices of James C. Shields, we help our clients file for bankruptcy. Talk to us about the best form of bankruptcy for your individual situation. For more tips on avoiding bankruptcy remorse, please contact us.