02 Mar When Do I Know Its Right To File For Bankruptcy? 5 Top Reasons. Part II of II.
In my first article, I talked about the struggle that takes place when deciding to file for Bankruptcy Protection. In this part II of that article, I explain my Top 5 Reasons to File for Bankruptcy Protection.
Below I have listed what I consider my top 5 main reasons to file, although there is also a plethora of other reasons.
1) You and your family are priority number 1! If you can not realistically take care of yourself and your family, then the same rationale applies to your creditors. Eventually, you will not be able to take care of them. Of greater importance, is the fact that in this country there is no involuntary servitude. The Constitution provides us the pursuit of Life, Liberty, and Happiness. If this is subordinated to your creditors, you do yourself and your family no justice, and the basic constitutional principals are tossed aside.
2) Your credit will be better! This is a tough pill to swallow, but the reality is that when you eliminate your debt, you actually are improving your credit score. Generally speaking, 1/3 of your credit score with all three bureaus is based upon the debt to credit ratio. Bad credit always improves with Bankruptcy. Only good credit drops, but usually not as much as you would think and only temporarily. In most cases, its not uncommon to be in the 600 to 700 credit range within 1 to 2 years, provided you get at least 4 main lines of credit and maintain your payments.
3) Justice requires it! Bankruptcy actually has its roots from biblical times. In the Old Testament, the “Book of Numbers” required a financial release every 7 years. For centuries, mankind has realized that the forgiveness of debts actually creates a productive society. Risk taking, entrepreneurship, capitalism, etc., are created with these “releases” and “fresh starts.” Our founding fathers found this so important that they actually set forth a “uniform set of bankruptcy laws” in our Constitution!
4) There are no regrets! I have filed over 5,000 bankruptcy cases for San Diegans for the past 14 years. I have NEVER had one person regret it. Instead, in virtually every case I get “Thank yous” and hear “filing was the best decision of my life!” By the same token, even if you come into money at a later date, or change your mind, you can always repay your creditors!
5) Garnishments, Liens, and Bank Levies will be avoided! I see this happen so many times. People think they can manage their debts, pay some, forget others, and just try to maintain. Then all of a sudden they go into work one day to find an earnings withholding order has been sent to their employer wherein 25% of their gross income will be taken at the next payday. Or they go to pay their rent and the money has been taken from their bank account. Bankruptcy provides the peace of mind that this will never happen!
While there are many other reasons to file bankruptcy, such as to save a house from foreclosure, save an automobile from repossession, protect a co-signor, structure a repayment plan with the IRS, remove a lien off one’s residence, etc., the fact of the matter is that there is always more good that arises from any bankruptcy than the short term negatives.
If you are considering filing for bankruptcy, and are in debt over your head, take in your most recent paystub and list of creditors to an experienced bankruptcy attorney and be open minded. What you might hear at that consultation shouldn’t surprise you. While the decision to file is usually the toughest decision, once it is made, it is always the most gratifying decision you can make!
Written by Michael Doan
Bankruptcy Law Network (BLN)
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