Millions of people who would have never dreamt of filing bankruptcy before are now being forced to consider taking that step. The recession has driven countless people to the brink of financial disaster yet many hesitate to take the protection offered by the bankruptcy courts. Why? Because they are afraid; fear of bankruptcy’s aftermath keeps them from finding relief from their overwhelming debt. Experts want you to know that filing bankruptcy will not permanently destroy your financial life.
Bankruptcy is Not the End
Yes, bankruptcy does have repercussions. It can stay on your financial history for up to 10 years. You will have to work hard to regain your good credit score. Getting loans and credit cards may not be easy. If you have been using credit cards to pay your monthly expenses because you don’t have enough income to do so, you may have to find a different way because those credit cards could be gone.
The good news is that most people can manage to retain most of their assets. If you have enough income to pay your house or car payments after the bankruptcy, you will probably be able to keep those items. If you have money in a 401K or other retirement savings plan you will more than likely hold on to that as well. You will be rid of most of your unsecured debt like credit cards and medical bills, the harassment from creditors will stop, and, most importantly, you will have a fresh start.
Timing is Critical
When is the right time to file? If you have been threatened with foreclosure or repossession, if you can’t pay all your bills, or if you are experiencing long term unemployment, it is time to talk to an experienced bankruptcy attorney.
If, however, you know you have a major expense like surgery taking place in the near future, wait until after that happens. You cannot file on expenses that occur after the bankruptcy and you cannot file again for seven years. Timing is important.
Many people have already decided now is the time. The number of US citizens filing bankruptcies in the last year surged, with Hawaii showing the greatest increase of filers. In Hawaii bankruptcy filings were up by nearly 28% in 2010.
If you live in Hawaii and are struggling to decide if the time is right to file bankruptcy, talk to an experienced Hawaii attorney and see if bankruptcy could be the solution for you.