On behalf of Law Offices of Mark M. Kratter, LLC on March 11, 2013
Most societies don't punish people for being unlucky or even imprudent enough to have reached an economic impasse marked by overwhelming debt. The bankruptcy laws have long been available to legally relieve people from intrusive debt collections and to get a fresh start in life. The filing of a consumer bankruptcy in Connecticut can be a lifesaving event for many people, but they'll benefit from studying the pros and cons and making an informed decision before choosing to go forward.
Most consumers file either a Chapter 7 or a Chapter 13. The initial benefit of filing for bankruptcy is that relief from creditors is immediate and automatic - an order called an 'automatic stay' is issued preventing creditors from taking any action against a debtor. Bankruptcy involves a court administering an orderly process whereby the consumer will potentially pay certain debts, eliminate others without payment, and sometimes liquidate assets in return. However, asset liquidation is rare because there are usually sufficient federal and state exemptions allowing retention of most consumer property.
A Chapter 13 is a consumer bankruptcy often filed by homeowners wanting to keep their home by making a monthly payment plan on the past due mortgage arrearages. In some cases, the Chapter 13 debtor can even erase a second and third mortgage on the residence if the amount owed on the first mortgage exceeds the home's value. Chapter 7, on the other hand, is best used for eliminating credit card and other unsecured debt. In many cases, it's legally appropriate to erase all credit card debt without making any payments.
Probably the most significant detriment mentioned is the negative damage to one's credit. Generally, a consumer bankruptcy can be listed on the credit record for up to 10 years. However, due to skyrocketing bankruptcy filings, many creditors have lessened their standards, and consumers often find they can restore their credit in a relatively short time.
When filing a consumer bankruptcy in Connecticut, consumers will benefit by using experienced bankruptcy counsel to guide them through the complexities of the law. There are several important choices to make and the process from beginning to end is an arduous one. Most people appreciate having the knowledge and assistance of professionals in making their way through the process.
Source: mnn.com, "Should you file for bankruptcy?" Chad Brooks, Feb. 18, 2013
