Are you in debt and are not able to make the minimum payments? Then, maybe it is time; you need to stop fighting the inevitable and file bankruptcy. Some consider filing bankruptcy as quitting, but in actuality, it is a new financial beginning for you.
Why so? Many of us have a question in our head, and that is, “Can filing for bankruptcy be good for me?” Well, in order to get the answer to this question, first we need to get an idea about some basic things. You can consult attorneys in Port Charlotte FL, for detailed knowledge.
What Does ‘Bankruptcy’ Mean?
We all have a loose understanding of the term ‘bankruptcy.’ but most of us do not have a proper idea about it and especially in the uncertainty of this coronavirus pandemic.
Essentially, bankruptcy is the condition of an individual or a business when the person or the business owes more than the amount they will be able to pay.
The concerned party can file for bankruptcy themselves. Or the creditor, who is owed money from the party, also can file for bankruptcy on behalf of the party if any debt is not being paid.
Why Should You File For Bankruptcy?
The reason why someone is filing for bankruptcy or seeking debt forgiveness will be different for different people or businesses. As per a study, 78% of the personal bankruptcy cases are the result of extreme pressure from the debt collection lawsuit.
But there are some common reasons. And they are.
- Medical Bills.
- Loss of income.
- Huge amount of unsecured debt such as from a credit card.
- Owing taxes.
- Garnished wages due to a lawsuit.
- A lawsuit.
What Will Happen, When You Will File A Bankruptcy?
In the starting, the debtor will hire a commercial lawyer, and one also can consider an attorney in Port Charlotte FL. A professional person will help you in filing for bankruptcy. The eligibility of the party will also be determined on the basis of some specific factors.
After that, the court will appoint an OA or Official Assignee, who will then examine the estate of the party. In order to settle the debt, the divided money and asset will be given to the creditor. In case there is still money owed. The OA will set a scheme for the party to pay the debt.
Under this scheme, until the debt is a scenario, the debtor has to make the monthly payments. In this scenario, both your basic needs and income will be taken under consideration so that you can make those payments within your means.
Can Filing For Bankruptcy Be Good For You?
Not a person on this earth wants to find himself or herself in this situation of not being able to pay the debts. But in this case, filing bankruptcy can save one from further damage and offer an invaluable chance to recover.
Here are the advantages of filing bankruptcy that will prove filing for bankruptcy can be good for you.
- The creditors will no longer be able to charge interest. So, at their current amount, your debt will be frozen. It will also prevent you from getting into another debt.
- The Official Assignee or the OA, who is assigned by the court, will set your contribution or repay the debt on a monthly basis on the basis of your basic needs and income. This will ensure that while making your payments, you will be able to look after yourself and also your family within your means.
- Within the bankruptcy order, the creditors will not be able to take any legal actions against you for any of your debts.
So, now you know all the basic things about filing for bankruptcy. So, now you will be able to take the decision of whether to file for bankruptcy or not by yourself. But it is always advised to consult with an attorney Port Charlotte FL to get a better understanding and assist you with the whole process.