Many New York residents shudder when they think about filing for bankruptcy. However, their fears about the process often stem from the feelings of personal defeat they believe they would experience if they chose to utilize bankruptcy protections. While personal stigmas and shame are certainly potential consequences a person could feel after filing for bankruptcy, non-subjective factors also exist that can make filing for bankruptcy an incredibly difficult undertaking.
According to an article promulgated by the Association of the Bar of the City of New York, there are many consequences to filing for bankruptcy. First, bankruptcy can cost money. Certain processes can require debtors to pay filing fees. Additionally, courts can require debtors to take credit counseling courses that charge fees for their services.
Second, filing for bankruptcy can result in individuals losing a lot of their property. Though some exemptions exist that allow individuals to keep certain items of real and personal property, those who file for bankruptcy can see many of their worldly goods sold off to satisfy obligations they have to their creditors. Bankruptcy can leave people with only a fraction of what they had when they started the process.
Third, if filing for bankruptcy does not completely work, individuals are generally barred from refilling for a period of years. Even longer than the filer’s wait to re-file is the amount of time he must wait to see the bankruptcy filing disappear from his credit report. Therefore, although bankruptcy can help a person satisfy his debts it can loom over his financial history for a decade following its resolution.
The consequences of filing for bankruptcy discussed in this post are only some of the issues a person can face when undertaking the process. Each individual must weigh the problems associated with his own debts and unpaid bills before he decides if bankruptcy will improve his situation. For those who have questions about the information contained in this post, bankruptcy lawyers can discuss the particulars of individual cases and help their clients find solutions to their debt problems.
Source: Association of the Bar of the City of New York, “Personal Bankruptcy: Is It Right For You?” Accessed on Oct. 13, 2014