WHEN BANKRUPTCY IS THE BEST DECISION

The worst thing about filing a Chapter 7 or Chapter 13 bankruptcy is agonizing over the decision to file.  Many people worry about under-going a grueling investigation concerning their finances, losing everything they own, and having to deal with a very public court proceeding.  The truth is that bankruptcy can be the best decision for someone drowning in debt.

Once you decide to file bankruptcy, you will discover that the procedure is very simple and straight-forward.  The bankruptcy process essentially breaks down to an accounting to determine whether you have sufficient assets or income to pay something to your creditors.  If you do, then your creditors will receive some payment and the rest of your debts are discharged.  If you don't, then creditors receive nothing and are discharged.  There are a few narrow exceptions to discharging debts, like student loans, child support, and recent taxes, but most debts are dischargeable.

Nearly all those who file bankruptcy are able to keep all of their property.  The United States Trustee Program reports that nationwide only around four percent of all Chapter 7 bankruptcy cases have assets that are turned over to the bankruptcy trustee.  That means one case in twenty-five may have non-exempt property that is taken and sold to pay creditors.  An experienced bankruptcy attorney is able to identify assets that may be at-risk and will advise the client regarding options for protecting the asset from turn-over to the bankruptcy trustee.

Many people are unaware that the bankruptcy process is quite private.  The press reports on celebrities who file bankruptcy, but unless you are famous or infamous, you will likely not receive any attention.  Newspapers no longer publish the names of individuals who file bankruptcy.  Notice of your bankruptcy is sent to your creditors, but not to your friends, family, bank, or your employer (unless you owe money to them).

The typical debtor never sees the bankruptcy judge, and there is generally only one meeting with a bankruptcy trustee (known as the "341 Meeting of Creditors").  This meeting will take place with other debtors and, while it is open to the public, it is rare that anyone other than the debtor, the debtor's attorney, and the bankruptcy trustee attends this meeting.  Most clients report being very nervous about meeting with the bankruptcy trustee leading up to their 341 Meeting, and are subsequently surprised at how fast and easy the meeting actually is.

Most clients confess that bankruptcy was the best decision to discharge overwhelming debt.  Once the burden of debt has been lifted, you feel better and your financial condition can begin to improve.  If you are struggling with debt, you must speak to an experienced bankruptcy attorney and learn how the federal bankruptcy laws can provide you with a fresh start.