Some of our Escondido readers may have so many financial problems that they simply have no idea how to approach them. Some people do their best to pay off debt and live within a budget. Others borrow money from payday loan stores and lean on credit cards just to make ends meet. Still others will look into the possibility for filing for personal bankruptcy. No one ever wants to find themselves in this type of situation, but is it really that bad to consider bankruptcy over the alternatives?
Some experts say that bankruptcy is certainly a viable option for those individuals or families who can't shoulder the burden of unmanageable debt. These experts say the alternative of simply ignoring the problem of debt and hoping it will go away is by no means a credible option.
The problem is, however, that many people just don't know a lot about the details of what is involved in a bankruptcy filing. People should understand that bankruptcy is the legal pathway to inform creditors that someone isn't making enough money to pay their debts. Bankruptcy is the means by which an individual or family can deal with this dilemma in a responsible manner. If people choose to just ignore their problems instead of filing bankruptcy, they could face greater problems.
Chapter 7 bankruptcy is often the popular option, as this is the form of bankruptcy in which the filer lists all non-exempt assets, which are then sold off to pay outstanding debt. The filer gets to keep all exempt assets. Further, any debts that are not paid off by way of the liquidation of assets are discharged, leaving the filer in a position to seek a fresh start for the household finances.
Source: CNBC, "The good thing about bankruptcy," Sakina Spruell, Oct. 21, 2013