Our clients often ask us if filing bankruptcy is bad. It isn’t uncommon for a client to express to us that they feel shame or embarrassment about filing for bankruptcy.
People want to pay back their debts. People who can’t pay back their debts, feel bad that they are unable to do so. We’ve been practicing bankruptcy law for over 35-years, and in our experience, the majority of debtors truly deserve the benefits of bankruptcy. Few people actually want to file for bankruptcy and fewer still are taking advantage of the system.
No, filing for bankruptcy is not bad.
It is unfortunate that bankruptcy has a social stigma because filing for bankruptcy is not “bad” and it is not a moral decision. It is a financial decision. And when someone makes the difficult decision to file for bankruptcy protection, it is likely the best financial decision for them.
How can bankruptcy be a good financial decision? Well, if you are going to be drowning deep in debt for many years, then erasing that debt is a good financial decision. Consider this: debt that takes years to pay off costs significantly more in interest charges, and those large monthly payments year after year is money that would be better funneled into emergency savings and a retirement account. We are not saying that bankruptcy is the right solution for everyone with debt―it isn’t. But if you cannot reasonably pay back your debts within three years, then it is time to explore if bankruptcy is a wise financial decision for you.
Filing for bankruptcy doesn’t destroy my financial future? Quite the opposite, in fact. After bankruptcy your dischargeable debts are gone, so you will no longer be making monthly payments on credit card debt or medical bills. This frees up money to put toward building a healthy financial future, including an emergency fund and retirement funds.
Also, filing for bankruptcy does not destroy your credit forever. When you file your credit score will decrease in the short term, but many debtors are surprised how quickly their score begins to recover after bankruptcy. Further, if you fell behind on debt payments prior to filing, carried high debt loads, or were sued for unpaid debts, then your credit score was already taking a hit month after month before filing for bankruptcy.
Filing for bankruptcy is not uncommon? Across the nation, there were 759,243 personal Chapter 7 and Chapter 13 bankruptcies filed in 2017. In Georgia, 45,583 individuals and families filed for Chapter 7 or Chapter 13 bankruptcy protection in 2017. By these numbers, you can see that bankruptcy is not uncommon.
There are many reasons why people file for bankruptcy. Prior to filing many people experience a job loss, divorce, death in the family, a costly medical emergency, or another unavoidable situation. The types of debt that cause the most problems are medical debts and credit card debts.
Deciding Bankruptcy Is the Right Choice for You
Here at the Law Office of Barbara B. Braziel, we will make sure you understand the benefits of bankruptcy and how filing will affect you and your family. We file hundreds of Chapter 7 and 13 bankruptcy cases every year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.
The Law Offices of Barbara B. Braziel proudly serves Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City, GA.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code. Find out more about Bankruptcy in our guide: All About Bankruptcy.