When Can Bankruptcy Help with a Job Loss and Bills?

Given the current status of the economy, layoffs and company downsizings are becoming more and more a common occurrence. If you are one of the millions of Americans who are out of work due to poor circumstances, you have, more often than not, experienced trouble in handling your financial responsibilities. These circumstances can leave you looking for any possible way out of the troubles experienced when the loss of a job allows your bills to grow out of control.

Benefits of Filing for Bankruptcy

In order to protect yourself and your family’s well being, you may decide to file for bankruptcy. Filing for bankruptcy can help you regain control of your financial situation and take care of outstanding debts with creditors who may be pursuing a lawsuit against you in order to collect payments. You generally will have a choice of filing Chapter 7 or Chapter 13 (provided you don't make too much to qualify for Chapter 7), but for most people with no job, Chapter 7 is best because it allows you to discharge your debts entirely after the sale of some assets is used to pay some of those debts. This will allow you to continue to use your income as a means of keeping up with your everyday living expenses and family costs.

Filing for bankruptcy can clear you of the burdens of creditor harassment as well.
You will be able to focus on current costs and your financial future again, as opposed to dealing with the daily pressures of past medical bills, credit card debts, and most personal loans from lenders.
Though this action will not clear you of responsibility in legal matters of negligence or restitution from criminal activity, it can greatly assist you in taking the burden of most forms of debt off of your shoulders.

The First Step

Before pursuing the option of a bankruptcy filing, you should take an in-depth look as to whether or not this is the right option for you. You should first try to negotiate payment agreements with your creditors and make every attempt to honor the commitment you agree to. Depending on whether or not your creditor has filed a lawsuit against you, a Declaration of Exemption may be another feasible route to relieving yourself of creditor debt without forfeiting property. As always, a consultation with a Certified Bankruptcy Professional is usually the best way to determine if you should file at all, and then what form of bankruptcy to file.

Life After Filing

Once your debts have been relieved through bankruptcy proceedings, your financial status can be somewhat confusing. Your outstanding debts have been absolved i you declared chapter 7, but your credit score reflects the blemish of the filing. At this point you need to be very careful to not enter into financial obligations that could result in living beyond your means. Being proactive in the process of fixing your credit status by making every payment you have on time and living within your newfound means is absolutely imperative in regaining your financial structure.

Getting Help

If you have lost your job and the bills are piling up, speak to an experienced bankruptcy attorney. He can help you to determine if you are eligible to file Chapter 7 bankruptcy or if Chapter 13 is best for you. He can also help you to understand the differences between these types of bankruptcy and choose which makes the most sense in your situation.

Think Bankruptcy Might Be for You?