Debt comes in all shapes and sizes, but unlike many other problems, debt creeps up on many people. Sometimes, you think you’re doing well financially as the debt slowly builds until it slaps you in the face. For others, they know they’re in debt and think they can manage it. Sometimes you can, but many people think as long as they pay the minimum, they’ll be debt-free over time. That may be the case, but it would take a very long time, and you would end up paying significantly more because of the added interest.
Sometimes one significant event, like a difficult medical situation, divorce or unemployment, plunges people in harrowing amounts of debt. For many years, bankruptcy was seen as evil as bankruptcy myths ran amock, but the perception has been shifting. More people realize the benefits of personal bankruptcy like protection from creditor harassment and relief from most, if not all, of their debts.
The purpose of a bankruptcy attorney
Bankruptcy attorneys are professional financial guidance, handle all of the legal paperwork required to file and represent your financial best interests in bankruptcy court.
Representation goes a long way in court as those who filed for Chapter 7 (liquidation) bankruptcy relief had their debts eliminated in over 96% of cases. Individuals who represented themselves were granted debt relief in 66.7% of filings.
Chapter 13 (reorganization) filers saw a more drastic comparison as filers who were represented by an attorney succeeded in receiving debt relief in 41.5% of cases. Only 2.3% succeeded when representing themselves in court.
Signs that you could benefit from representation
As mentioned, financial distress slowly evolves, but some signals point to bankruptcy being in your near future.
- You can only afford to make minimum monthly payments
- You have begun to rely on credit cards when purchasing everyday essentials
- You have maxed out your credit cards, leading to rising interest and increased debt
- Overdraft fees are showing up each month
- Collection agencies are harassing you
- Creditors you owe are threatening to sue you over your unpaid debts
- Your unique situation doesn’t allow you to qualify for other debt management tools or a debt consolidation loan
- Unemployment, divorce or medical condition has completely eroded your finances
It’s important not to disregard bankruptcy as an option, as it can be a financial savior in certain situations. Bankruptcy offers the opportunity to reassess your financial decisions an circumstances and educate yourself on money management tools.