If you think you are up to your neck with your debts, you should think about filing for bankruptcy. To explain it simply, bankruptcy is a law enacted by the federal government to protect individuals who have too much debt and have no means to pay for it. This means that the debt is much more than the income of the borrower. However, before you decide to practice your right as an American citizen, you should first ask yourself the question “Can I file bankruptcy?”
Filing for bankruptcy is the last resort offered to individuals who no longer have the capacity to pay for their debts. The government can decide to discharge your debt if you meet their preset eligibility requirements. However, you have to understand that this is not as simple as it sounds. There are many things that you have to do before you can answer the question “Can I file bankruptcy?” with a resounding “Yes”. A bankruptcy attorney can help you sort through the details. If you don’t know of one, you can always use a lawyer referral service.
For one, this form of debt relief will appear in your credit records for up to ten years. This means that for ten years, it will be difficult for you to make big purchases or apply for loans. Bankruptcy on your credit reports is like a red flag for creditors that warn them that you are financially irresponsible. Or even if your loan application has been approved, your interest rates will be higher than normal. This is what the creditors do to protect themselves from people who have a bad credit history. Before you answer the question of “can I file bankruptcy?” you might first ask yourself if you really want to.
The good thing about this is that after ten years, your bad credit history will be completely deleted from your records. This gives you a chance to start fresh with building your credit without those negative records in the past haunting every financial move you make.
These are some of the answers to your question “Can I file bankruptcy?” Make sure that you meet all these criteria before you file for bankruptcy.