A Bankruptcy Lawyer’s Blog

When Bankruptcy is a Legitimate Option

The state of the economy is making this situation all too common; your credit cards are maxed out, instead of paying bills on their due dates you’re paying them 30 days past due. You’re using caller ID to screen calls to avoid bill collectors. A creditor files a garnishment against your paycheck.

When your debts reach a crushing level that starts to control your life you have to ask yourself, "Is this time for me to consider filing bankruptcy?" You have to take a hard look at the pros & cons of filing for bankruptcy protection.

The process of filing for bankruptcy offers protection from harassing collection calls, letters and e-mails. It prevents creditors from contacting you at work or home, from send dunning letters or contacting your friends and family.

Filing prevents creditors from garnishing your paycheck and if they have already gotten judgments against you it requires that all collection actions be ceased. After you’ve filed a Chapter 7 or Chapter 13 action an Automatic Stay in Bankruptcy is imposed by the court.

This keeps a creditor from repossessing property or from selling property they already have in their possession. It allows you to keeps some of your assets and to workout a fresh start on your finances. A common fallacy about filing for bankruptcy protection is that you can be terminated from your employment as a result.

Not true! Federal law offers specific protection from an employer terminating or taking other actions against you for exercising your right to petition for bankruptcy protection. Bankruptcy will not, and is not intended to, offer protection from all debts.

Bankruptcy doesn’t affect obligations such as child support payments, spousal maintenance, alimony, current taxes (federal and state), student loans, governmental fines (local, state and federal), or civil judgments that are punitive in nature (those that are the result of intentionally malicious or deceptive behavior).

Also any creditor that is not listed in the bankruptcy petition retain their right to enforce the collection of your obligation. These are "non-dischargeable" debts. Also since many employers check an applicant’s credit history as a part of the per-employment process your ability to obtain a new job may be impaired for years after a bankruptcy filing.

John has been writing articles online for nearly 4 years now. Not only does this author specialize in a variety of subjects, but you can also check out his latest website on Turkey Deep Fryer which reviews and lists the best Masterbuilt Turkey Fryer.