'Should I file for bankruptcy?' is a question that folks in debt often ask themselves, so here are some answers to common questions that may help you decide:
The best option, obviously, is to arrange a favorable payment plan with creditors. We always suggest that you consider alternatives such as negotiating with creditors, credit counseling, and credit card or loan refinancing. However, after those options have been exhausted, you may want to consider bankruptcy, especially if:
You've been unemployed for an extended time and have no unemployment income or savings to depend upon.
Your home is nearing foreclosure.
Your wages are being garnished.
You have delinquent taxes.
Bill collectors are making your life a living....well, you know.
There are pending lawsuits for overdue bills.
Of course, everyone's situation is unique, so seeking professional advice to evaluate your options is the first step.
Common MYTHS regarding bankruptcy:
Bankruptcy damages your spouse's credit rating
Not necessarily. Filing for bankruptcy does not affect your spouse's credit rating. That is, unless you're filing for debt listed in both of your names. In that case, you should file together.
You are only allowed to file for bankruptcy once.
Not true. The fact is, you can receive a discharge in a Chapter 13 that is filed more than 4 years after a Chapter 7, 11 or 12 filing in which your receive a discharge. You theoretically could file multiple Chapter 13 cases, however, after the second and third filing within a year’s period, you may not receive the protection of the normal injunction against creditors afforded by the bankruptcy code that protects you against repossessions and other creditor actions.
You can also receive a discharge from a chapter 7 filing every eight years.
You can be imprisoned for owing money.
Not true. Although some unsavory debt collectors may suggest it, there is no law against owing money. Debtor's prisons are a thing of the past. Of course creditors can file suit against you, take you to court, have liens applied to your property, repossess items, and garnish wages...but they can't put you in prison.
Bankruptcy is expensive.
Not at all, when you consider the savings you will encounter by avoiding much higher interest charges and penalties on debts you can't pay. In addition, an attorney can give you sound legal advice and help you avoid any mistakes that could be made otherwise.
We have handled debt counseling and bankruptcy cases for thousands of Tennessee residents over the last three decades and welcome the opportunity to counsel you as well. Feel free to contact us anytime and we can tell you the first few steps necessary to get this process underway.
Email us by clicking here, or call us at (731) 423-1888, (901) 730-4567, or (615) 371-6136.