The American economy is still on the up trend from its recent recession. However, many Americans are still feeling the effects of the recession. Some are still struggling to hold onto their houses that have still not recovered in value. Some are paying off debts that were incurred during the recession. Others are dealing with poor credit issues as a result of the poor economy during that time. Many of those still struggling with the effects of the economy may benefit from declaring bankruptcy. They may have avoided bankruptcy up until this point, but it can be a great way to wipe the slate clean and start over financially.
Wipe out past debts
Paying for past debts can prevent you from paying current bills. People with excess debt that takes up much of their paychecks may struggle to make current payments. Even if they are able to eventually pay off that previous debt, they are likely to incur new debt because of the additional expenses and monthly payments. When you declare bankruptcy with your legal team, you are able to wipe out old debt and focus on establishing new payment habits.
Speed up the credit improvement process
When you declare bankruptcy, the bankruptcy will stay on your credit for up to 10 years. However, if you struggle to make payments on high amounts of debt, the credit recovery process may take even longer. If declaring bankruptcy is inevitable, you are only putting off the amount of time it takes to clean your credit entirely. Some lenders are even willing to work with you during the post bankruptcy period, providing you with opportunities to begin rebuilding your credit. Your bankruptcy attorney can help you find these types of opportunities.
Sometimes cheaper than paying off debt
An average Chapter 7 case can cost anywhere from $1,500 to $3,000. If your debt is much higher than that, it may be more financially wise to file for bankruptcy. Your bankruptcy legal team can help you to explore your options and how much will be wiped clean during the process. Small businesses may find it ideal to file for bankruptcy, rather than paying on debt for many years, especially when this debt affects their personal finances as well. Consider the repayment options and what type of bankruptcy claim you are eligible for.
Help manage debt payments
There are two types of bankruptcy filings. One of them allows you to wipe out your debt completely. The other allows you to combine all of your debt into one, affordable, monthly payment. Even if you do not qualify for the bankruptcy that allows you to wipe out your debt, it can be helpful to have all of your payments combined into one. You no longer have to pick and choose which payments you should make. Your attorneys legal team can help you with negotiating an affordable debt payment that you are able to make.
High success rates of bankruptcy
If you have decided that filing for bankruptcy is right for you, you will find better success rates of being granted bankruptcy if you use an attorney. It is also important to go with a bankruptcy legal team, rather than a divorce attorney or other specialized attorney. With an attorney, the success rate for Chapter 7 bankruptcy claims is over 95%. Your legal team can help you with the process of declaring bankruptcy.
Many areas of the economy have recovered from the recent recession. Bankruptcy rates have declined. For example, in 1980, businesses accounted for 13% of bankruptcies. Today, they account for about 3%. Personal bankruptcy cases show a similar decline. However, bankruptcy filing may still be an option for those struggling with long lasting effects of the recession. If you are struggling to make payments and have high amounts of debt, consult with your legal team on your bankruptcy options.