Our message in this blog, week after week, is consistent. Consumer bankruptcy can be a useful debt relief strategy for people who are struggling with unsustainable bill payments due to job loss, a serious illness or other circumstances.
It’s true that, in the last year, the number of bankruptcy filings across the nation has gone down some. Overall, filings in the last year have gone down 14 percent.
This decrease, however, may be due to the fact that many consumers have cut back on their spending and borrowing in the rather austere economic climate that has followed the Great Recession. Many people in the San Antonio area and throughout the nation still have problems with credit card debt. And many people are only one health or employment crisis away from serious financial problems.
In short, the same basic causes of bankruptcy that were present a year ago are still there today. The question, then, for people in need of debt relief due to one of those causes, is whether bankruptcy is the right strategic choice for them.
Of course, no choice is perfect. Even when it is the right choice for someone’s circumstances, bankruptcy cannot solve all problems. For example, there are some types of debt that it simply doesn’t reach. Student loan debt, for example, can usually not be discharged, except in very exceptional cases of undue hardship.
Child support is another type of debt that cannot be discharged. Alimony is another.
But the benefits of bankruptcy are considerable. It isn’t only that many debts can be discharged or restructured. The automatic stay against collection proceedings that follows a bankruptcy filing is a valuable way to call a halt on fiancial chaos and get clear on your plan for moving forward.
Source: Huffington Post, “When Is Bankruptcy the Answer?” Dedrick Muhammed, August 19, 2013