Is bankruptcy for everyone?

Bankruptcy maybe the best, or only, solution for extreme financial hardship but it is not for everyone. As we discussed in our other articles, it should be used with extreme caution and only as a last resort. We know that it has long standing consequence and certain “collateral” consequences. One should study the pros and cons carefully before deciding to file for bankruptcy. One should not wait until the last minute to file for bankruptcy. There are several advantages to filing for bankruptcy. Filing provides a fresh start to most of the filers. Most of the debts are discharged. Moments you file for bankruptcy, most collection efforts are stopped immediately. As you may know, each bankruptcy has within its ambit, an automatic stay, which stops most collection activity immediately, including home foreclosures and care repossessions. If a creditor continues to try to collect a debt, that creditor may be held in contempt of court or ordered to pay damages. The automatic stay applies even to the loan that you may have obtained to buy your car. If you are current, your creditor may not bother you but if you are late, your creditor may obtain a motion to lift stay and proceed under the remedies available to him under your contract. The filing of bankruptcy will automatically stop the legal suit filed against you. Most of the lawsuits will go away except personal injury lawsuit where the personal injury is caused by your negligence. If possible, file the bankruptcy case before a judgment is rendered against you in state court.

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