It can be very painful to file for bankruptcy. When their debts are too much to handle, people or businesses can file for bankruptcy as a last resort. When someone files for bankruptcy, they have a lot of debt and their creditors are practically camped out in front of their house. Most of the time, a person leans toward bankruptcy because of medical, legal, or credit card bills.
Even though bankruptcy lets a person live without credit in the future, it hurts the credit score for about 10 years, so it's not a very easy choice. Also, some cases, like those involving a mortgage or alimony, may not even be looked at by the court as good reasons to file for bankruptcy. Bankruptcy should also only be thought of after all other options have been used up.
When someone files for bankruptcy, he or she can go to court on their own behalf. But most bankruptcy laws can seem confusing to the average person, so it is best to talk to a lawyer before filing for bankruptcy. Most lawyers will be able to give clients a general idea of how the process works, and a lawyer who works with credit counselling will be able to give the right advice.
Most lawyers will talk to you for free about your case. It is very important to choose the right lawyer because if they don't work on the case, they can make or break it.
Instead of just hiring a lawyer based on how appealing their ads are, it is best to do some research. There are many licenced lawyers who specialise in bankruptcy cases who work for law firms. It is recommended that you choose one of these lawyers to handle the case.
A new bankruptcy law passed in 2005 says that you must get credit counselling from a licenced company at least six months before you file for bankruptcy. With this in mind, many law firms have started to offer these services to the general public. These companies are licenced and have agents who can help people and businesses with credit issues. They might even be able to come up with a way for the business or person to work something out with the creditors.
