Over one and a half million people file for bankruptcy each year. With inflation on the rise and wages at a low point, more people than ever are finding themselves in innumerable debt they are unsure of how to pay off. Medical debt, credit card debt, and student loan debt are only some of the taxing ways that owing money takes hold of San Pablo residents.
Due to unforeseen circumstances, a global pandemic has added to an already destabilized marketplace, and many businesses are finding themselves in debt as well. Can filing for bankruptcy be the cure? Possibly, but there is stigmatization surrounding the term bankruptcy.
People compare bankruptcy to failure and not taking accountability, but it isn’t always so black and white. Declaring bankruptcy isn’t always for everyone, but it might make sense for you.
What is Bankruptcy?
Bankruptcy is a legal term for a court proceeding. When you seek to file for bankruptcy, you are declaring that you are unable to pay off your debts. The judge and court go through your assets and liabilities in order to make a decision to cancel some, or all, of your debts.
Once the court makes its decision, you’ll start going through the official process of filing for bankruptcy.
Advantages of Bankruptcy
Is bankruptcy always bad? Even Donald Trump has filed for bankruptcy four or more times. Despite your politics, these decisions have proved to be a successful business choice for Trump and many others, allowing them to start over.
The process isn’t necessarily good or bad. Honest consumers needing to file can find it advantageous. It can help people in tough situations, such as San Pablo residents who have accrued medical debt, lost a well-earning job, or had an ex-spouse run up their credit card bill.
If you cannot pay these, or similar debts, bankruptcy gives you the opportunity to stop a home foreclosure or repossession of a property. If you’re facing garnishment of wages, it can put a stop to that as well.
Disadvantages of Filing for Bankruptcy
There are certain disadvantages to be aware of. First off, certain debts are not covered by bankruptcy. Student loan debt, government debt, and child support cannot be removed through filing for bankruptcy.
Someone who could afford to pay off their debt but chooses to file for bankruptcy will have made the wrong decision too, and it’s expensive to file. Bankruptcy also contributes to a bad credit score that was already likely poor to begin with.
Your public record will also state that you filed for bankruptcy, which is something to be mindful about since it will remain on record for seven or more years.
Talk to a San Pablo Area Firm
There are many circumstances that will help you determine if filing for bankruptcy is the right thing to do. Talking with a professional in the San Pablo area can help you weigh the pros and cons of filing and help you to decide what to do.