Is bankruptcy right for you?

On Behalf of | Nov 12, 2020 | Bankruptcy |

When Alabama residents get to the point where they are considering bankruptcy as an option to address their debt, they have usually considered all other options. Although household budget adjustments or debt consolidation plans can sometimes be enough to get debt burdens under control, bankruptcy can be a solid option when all other paths fail.

Choosing bankruptcy

So, is bankruptcy right for you? A recent news article noted some factors to consider when making this decision. For starters, it is important to understand that there are different types of bankruptcy, but that Chapter 7 bankruptcy – commonly known as “liquidation” bankruptcy – is the most common type for help for individuals. The basic premise of Chapter 7 bankruptcy is that your non-exempt assets are sold off, and then the proceeds from those sales are applied to debt obligations. However, many assets are exempt from the bankruptcy process.

Another important point that was noted in the recent news article is that although there are some short-term impacts to your credit and overall financial status when you file for bankruptcy, the fact is that this process exists for those who are simply unable to chart any other path out from under crushing debt burdens. The long-term benefits can be huge, and can help Alabama residents get back to a place of financial stability.

Make an informed decision

Ultimately, the decision to pursue bankruptcy is unique to each individual or family. Your financial situation may seem untenable and, if so, it may be a good time to explore whether or not filing for bankruptcy is the right move for you.