Today, Filing Bankruptcy Might Be A Great Investment

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Spending money to file for bankruptcy almost sounds counterproductive, but it could be the best investment your family ever made. In today"s economy, banks are only paying barely 1% for money in one"s savings account. The volatility of the stock market makes it a terrible investment for anyone that needs a long-term return. Today, most Americans are buried under a mountain of credit card debt and are continuing on making the minimum payments just to keep those accounts open. Most people think that taking money out of a savings account to pay off credit card debt is off the table even though they are probably paying 26% interest on a credit card and receiving 1% interest on the savings account. Most people understand the whole concept of protecting what assets you have for a rainy day. That"s why, if there is no way out of debt, filing bankruptcy should be considered.

Back in 2010, the Wall Street Journal reported that the average American household had approximately $40,000 in personal debt. This is a substantial amount of debt that is next to impossible to pay off considering the interest rates being charged. An easy test for a person to take is to add up all their credit card bills and budget a monthly amount that is affordable to pay on the debt. If the debt cannot be paid off in six years if there are no more charges to the account, a bankruptcy filing should be considered. Filing bankruptcy can be a way to regain control of an individual"s life and pocketbook. Doing nothing, might seem tolerable and safe, will keep the individual in bondage to those debts for life. Most people have to weigh the positives against the negatives before deciding to file for bankruptcy. The easiest way to do this is to drop in on a bankruptcy attorney and have them take a look at the individual"s financial situation. The other way is to just do some research on the Internet.

If someone is on the fence and having trouble deciding on filing bankruptcy here are a few things that might sway their decision:

1. Right now is a good time to file for bankruptcy because the economy is down and the value of the individual"s property is much lower making it easier for the bankruptcy attorney to protect more property with the bankruptcy exemption laws.


2. Eliminating the stress is probably the best reason but usually not considered in the beginning. Stopping the creditors from constantly calling and threatening an individual can ruin a person"s health and marriage. Protecting one"s health should be at the top of the list.


3. Not filing bankruptcy because you"re worried about your credit report is foolish. Usually when a person gets to the place where bankruptcy filing is on the table, the person"s debt ratios and late pays have probably already destroyed their FICO score. After the bankruptcy discharge, the individual can quickly start rebuilding their credit putting the bankruptcy far behind in the rearview mirror.


4. Depending on the age of the individual filing for bankruptcy, a person should not wait until they are ready to retire. Facing bankruptcy head-on will allow the person to recover before retirement.


5. With the large number of families facing foreclosure, filing bankruptcy will eliminate any liability on a piece of property that the individual might want to surrender back to the creditor. It also can help an individual avoid foreclosure by eliminating all the unsecured debts that in many cases will free up enough money to make the mortgage affordable.


6. Filing bankruptcy will stop foreclosure. Filing Chapter 7 bankruptcy will stop foreclosure at least temporarily. Depending on the situation, the creditor has the right to file a relief of stay allowing them to restart the foreclosure process. Filing Chapter 13 bankruptcy is a better option when the individual is filing for bankruptcy for the reason of protecting a piece of property. All individual"s situations are different and should be discussed with a bankruptcy attorney as the results very.

For those in debt, inaction or pecking away at it slowly will solve the problem. People in this situation should consider discussing the matter with a bankruptcy attorney to see if filing bankruptcy will work for their situation. Many people find out that the facts they thought they knew about bankruptcy are more based on myths than understanding.

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Source by Lisa Michelle Jones

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