How to Determine if Personal Bankruptcy is Right for You

At one time or another in our adult lives, we may have seriously thought about filing for personal bankruptcy. While the prospect of taking such a drastic step is not attractive, it is reality for many people in today's world.

One of the stated goals of the federal bankruptcy law is to help the honest debtor get a fresh start in life. How financially over extended are you? Did you encounter something unexpected which had a major financial impact on your life such as a job layoff, divorce, high medical bills, etc? If so, you may be a candidate for personal bankruptcy. But if you are simply "tired" of paying your bills every month and not really financially strapped, you will probably not be approved to file. Yes, you do need the approval of the federal bankruptcy judge in order to file.

Also, what debts are you hoping to discharge? There are certain kinds of debts that cannot be discharged via bankruptcy, even if you get approved to file.

A personal bankruptcy case is begun by filing a petition. Something else that has to be filed is a statement of your assets and liabilities as well as a listing of your creditors. You are strongly encouraged to get legal help when filing for personal bankruptcy. Few people can understand the legal jargon in the current bankruptcy laws. There are many examples of this. Do you know what chapter of bankruptcy to file? That depends on your personal and financial situation. One way, your debts are reorganized and another way they are erased, but you may not be approved to file both ways. If you are married, should you declare personal bankruptcy for just yourself or should you file jointly with your spouse? These types of things make a huge difference in how you will end up after you have filed.

There are so many new rules and regulations when you go to file personal bankruptcy that you have to attend a class before you can start proceedings. Even though the majority of people filing are not doing so because of financial mismanagement, the law still says that they must attend credit counseling sessions. Even if you are a financial wizard, this is still a requirement.

Don't think you will lose your house just because you declare personal bankruptcy. Whether you keep it or not is determined by the specific exemptions that are available under your state law. Even though all states are bound by the federal laws, the laws concerning bankruptcy vary slightly from state to state. But you must file in the state in which you reside, you cannot file in another state just because they have more favorable laws for your situation.

Before deciding whether personal bankruptcy is what you should do, you absolutely need to explore any and all alternatives to bankruptcy. Certainly you do not want to have bankruptcy the first choice on your list. Go and consult with a lawyer and allow him to give his opinion as to what you should do.

Personal bankruptcy, is a choice that you will have to explore and consider based on your circumstances, compared with what alternatives may be available. Your best bet would be to get a bankruptcy evaluation from a qualified attorney to get their advice and recommendation for your best course of action. Remember, these types of people deal with bankruptcy every day and are much more familiar with your options.

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