You have probably heard that bankruptcy can harm your credit. You may be prevented from taking out any additional loans for many years. You may not be able to obtain a mortgage or a rental agreement. It will be difficult to get a loan on a vehicle. These possibilities can make many people hesitant about filing for bankruptcy. However, bankruptcy may be the best option for many people. The benefits may outweigh the consequences in some cases. A few of the advantages of filing for personal bankruptcy include the following.
When you have a lot of debt, the payments can get out of control. You can feel like you will never catch up, always struggling to repay your debt. When you file for personal bankruptcy, however, your debt is either forgiven or you are given one monthly payment, a payment that is often much more affordable. Filing for personal bankruptcy can actually help you get your finances in control.
Ability to save your house
Although filing for personal bankruptcy can damage your credit for a short amount of time, you are often allowed to keep your house in the bankruptcy. You will still have a living arrangement available while you work on your debt. Oftentimes, your mortgage payments will be rolled into the affordable monthly debt payment. If you do not file for bankruptcy, however, and you are unable to keep up with your debt payments, you can lose your house and have damaged credit anyways.
If you are filing for commercial bankruptcy, you may have even more at risk. You may have put your house up as collateral. If the business goes under, you could lose all of your savings and your house. Approximately 90% of all chapter 11 debtors have less than $10 million in assets or liabilities, less than $10 million in annual revenues, and 50 or fewer employees. If you file for commercial and personal bankruptcy, you may be able to save both of these. It depends on your individual bankruptcy case.
Hold onto your patents and properties
If a business is forced to sell, they are often required to sell off everything. This includes even the product or the specific intellectual properties that first made the business successful. Civil rights laws allow you to include your intellectual property in your bankruptcy case. This can allow you to try again later on, as you still hold the rights to the product or property.
You can start over
Some personal bankruptcy cases allow you to start over, depending on your specific bankruptcy issues. Although you may be left with years of poor credit, the bankruptcy allows you to start the repair process. You can obtain secured credit cards and personal loans that will let you begin improving your credit. Bankruptcy prevents a simply financial mistake from ruining your entire future.
Process of filing
When you file for bankruptcy, you will need to hire a bankruptcy attorney. The specific attorney that you hire will depend on the type of bankruptcy you are filing for. The specific judge that resides over your case will also depend on your type of bankruptcy case. For example, Judge Ward conducted over 150 jury trials, presided over hundreds of patent cases, including Hatch Waxman cases, and held in excess of 150 claim construction hearings.
It is also important to mention that your bankruptcy case may never go to trial. In 1962, 11.5% of federal civil cases went to trial. Today, experts say the percentage of civil cases that actually reach trial in the Federal courts is estimated to be about 1%. Your bankruptcy attorney, however, will ensure that your case is put in front of the correct judge and you will have a better chance at being awarded the bankruptcy.