Bankruptcy is a very positive process for most people who decide to file, but that does not mean it is an easy decision to make. A lot of factors have to be looked at to determine if the borrower can benefit from bankruptcy and if the borrower can legally qualify for bankruptcy. All that said, it is best to make this decision sooner rather than later to prevent one’s debt situation from skyrocketing further out of control; and, if bankruptcy is not chosen, then other debt management strategies must be engaged.
According to an assistant economics professor from Boston College, most people experience an immediate benefit from their bankruptcy filing. Their credit scores start to recover rapidly and within a year of filing, borrowers are much better off financially.
Part of the problem, and why people delay their filing, though, is often an issue that goes much deeper than pure economics and logic. Indeed, a lot of people feel like they are morally obligated to pay off their debts themselves, and they perceive bankruptcy as if it is a way of unfairly “cheating the system.” This, however, is not a good perspective to take. Indeed, the bankruptcy process is very much an integral part of the system and it most definitely helps society as a whole. It frees individuals from constant economic struggle and liberates them to participate and contribute to the economy again in a healthy way. It really is a win-win for society as a whole, so it is not only for selfish reasons that debtors may want to consider bankruptcy as a way of freeing themselves from debt.
Numerous law firms are available to discuss toxic debt issues with Arizona residents and most offer a free, no-obligation consultation. This can be an excellent way to gain a realistic perspective on the debt resolution options available for a particular situation.
Source: Nerd Wallet, “When Bankruptcy Is the Best Option,” Liz Weston, May 23, 2016