Individuals sometimes find themselves in dire straits financially, just as companies can. Fortunately, those experiencing tough financial times may be able to take advantage of personal bankruptcy. Here is a look at what filing for personal bankruptcy protection involves in Pennsylvania and elsewhere.
People can choose to go through the bankruptcy filing process if their debts have exceeded their liquid assets. This can easily happen due to unemployment. Other reasons behind financial troubles include incurring large amounts of medical debt or consumer debt, or going through costly custodial or marital issues.
Before filing for bankruptcy, a step that a consumer may want to take is to try to achieve a reasonable payment plan with his or her creditors. If this is unsuccessful, then filing for Chapter 7 or Chapter 13 bankruptcy may be a good option. A Chapter 7 bankruptcy filing involves liquidating assets in an effort to pay off debt. Meanwhile, a Chapter 13 bankruptcy filing involves coming up with a three-year to five-year plan for repaying the majority or all of one’s debt to creditors.
Understandably, being in a financially dire situation can be unsettling, frustrating and even embarrassing. The reality, though, is that many causes of personal bankruptcy are beyond people’s control. Sometimes, filing for bankruptcy is the best thing people can do for themselves to free themselves from the clutches of overwhelming debt. An attorney can offer the guidance needed to navigate the complex bankruptcy filing process. With an attorney’s assistance, it is possible to wipe one’s financial slate clean in Pennsylvania.
Source: usatoday.com, “Thinking of filing for personal bankruptcy? Here is how it works“, Judith Ohikuare, May 5, 2018