While bankruptcy cases have been decreasing in Mississippi and across the U.S. since the end of the Great Recession, many consumers still need to file for bankruptcy protections each year. However, experts say that people need to understand a few key points before deciding to file for personal bankruptcy.
First, in order to get maximum debt relief, consumers need to make sure they declare all their debts in their bankruptcy filing. This means that they need to carefully review their financial situation and make sure they understand what types of debt they owe and who they owe it to. Second, consumers need to realize that bankruptcy filings are long, complicated and easy to mess up. For example, many people fail to provide all the necessary documents, such as bankruptcy schedules, or fail to complete federal requirements, such as attending debtor education classes. Unfortunately, these types of mistakes can significantly delay a case.
Speaking of delays, experts say that, in most cases, consumers shouldn’t postpone filing for personal bankruptcy. Filing can eliminate certain monthly debt payments, which could provide extra funds for essentials, including food and gas. A bankruptcy filing also puts an end to debt collection efforts and harassing phone calls, which can reduce anxiety and stress. Finally, consumers should realize that bankruptcy is permanent. This means that, while it may only stay on their credit report for seven to 10 years, it will remain on their record for the rest of their lives. As a result, it could prevent them from getting certain jobs or loans.
Individuals considering bankruptcy could learn more about their legal options by contacting an attorney. An attorney could review a client’s case and recommend the best way to obtain financial relief.
Source: Born2Invest, “Personal bankruptcy: 4 things to know before filing one,” Christopher Elliott, Aug. 10, 2018