If you’re deciding whether or not filing for bankruptcy is the right decision for your situation, you’re probably facing one of the toughest decisions in your life. It can be very easy to lose sight of the bigger picture and to make decisions that you’ll regret later on.
With that in mind, here are just a few of the most important things you need to know before you file bankruptcy:
- You definitely aren’t alone. You’d be surprised by how many people file for bankruptcy each year in the U.S. Out of more than 900,000 bankruptcy lawsuits in 2014, approximately 97% of those cases were personal bankruptcy cases (as opposed to business bankruptcies). Filing for bankruptcy is often still stigmatized in the U.S. and many people don’t talk about it, especially if they’ve struggled with their own bankruptcy case.
- Believe it or not, you can actually have too little money to file bankruptcy. Yep, it sounds ridiculous, considering that you wouldn’t be considering bankruptcy if you had the money to repay your debts. Not only will you have to pay the fees of a bankruptcy lawyer, but you’ll also be slapped with court fees and paperwork/administrative fees, too. It’s common for a bankruptcy proceeding to cost hundreds of dollars when it’s all said and done.
- Bankruptcy may seem like the easiest way out of a tough problem, but as any good bankruptcy lawyer will tell you, it can’t work miracles for you and it does have consequences. If you decide to file for bankruptcy, you’ll be severely restricted in the lines of credit you can take out for up to ten years after the case; you might also have trouble finding housing, too, and expenses such as traveling and recreational activities will be very limited. That being said, you won’t necessarily be feeling the burn of bankruptcy forever if you find a good bankruptcy attorney and financial adviser to help through the process.
Filing for bankruptcy isn’t the perfect solution for every single case, but the more you understand it, the more you’ll be able to decide if it’s right for your case.