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Overcoming the Fear of Filing for Bankruptcy

We, here at Guardian Litigation Group, often advise our clients to file for bankruptcy when they are being crushed by overwhelming financial debt. More importantly, we encourage our clients to not fear filing bankruptcy. In our experience, the long-term benefits of filing a bankruptcy almost always far outweigh any detriments. Here are several reasons why you should not succumb to the fear of filing bankruptcy

Damage to Credit Can be Fixed

The main detriment to filing a bankruptcy is damage to your credit scores (which is a measure of creditworthiness). But, such damage is temporary and is repairable. Most debtors see their credit scores return to something like "normal" within a couple of years after their bankruptcy is completed. Further, most debtors can obtain an FHA mortgage within a couple of years and obtain a traditional conventional mortgage with a competitive interest rate at the four year mark. In the meantime, debtors are living without the financial stress and worry of having too much debt. Indeed, most debtors are able to start putting money aside as savings.

You Do Not Lose "All of Your Stuff" in Bankruptcy

Some debtors fear that if they file for bankruptcy, they will lose "all of their stuff." This is a myth and this fear should be put aside. Yes, it is true that all of a debtor's assets and belongings become part of the bankruptcy estate and also true that, in theory, all of the debtor's assets can be sold to pay creditors. But, unless your "stuff" is valuable and easily liquidated -- like stock certificates of a publicly-held company -- the bankruptcy court officials are not going to hold a "garage sale" to sell your belongings. The administrative costs and fees would not justify the time and expense. Furthermore, every debtor has bankruptcy exemptions which can be used to protect belongings from being liquidated for the benefit of creditors.

You Will Not Become Homeless

Some debtors fear that they will become homeless if they file for bankruptcy. This is another myth and another fear that should be put aside. If you are a renter, filing a bankruptcy will have no impact on your legal right to remain in your apartment (as long as you continue to pay your rent, of course). Moreover, filing for bankruptcy can potentially help a financially-stressed renter stay current on rent payments. This is because eliminating debt frees up income that can be used for rent. The foregoing applies equally if you own a home. For homeowners, there are additional proven legal strategies for protecting your home from being lost in a bankruptcy.

You Have a Trusted Legal Advocate at Your Side

Many debtors fear filing a bankruptcy because bankruptcy is a court proceeding. They think to themselves, "Oh no, I will have to go to court. I can't do that!" But there is no reason to fear filing a bankruptcy for this reason. This fear should be put aside. First, most debtors do not ever have to appear before the bankruptcy judge. Rather, for most debtors, the only meeting that they must attend is called the Meeting of Creditors. This may sound scary but this meeting is not held in front of the bankruptcy judge, is generally held in an informal manner -- more like a business meeting than a courtroom proceeding -- and creditors generally do not bother to attend. More importantly, by hiring an experienced and proven debtors’ rights attorney, you will have a trusted legal advocate at your side. Your attorney will help you prepare for the Meeting of Creditors and appear before the judge on your behalf if that is required.

Contact an Experienced Debt Relief and Debtors’ Rights Attorney

For more information, contact the Debtors’ Rights attorneys at Guardian Litigation Group. We can help if you think bankruptcy is the right option. We have the tools and experience you need. Our mission is to provide unparalleled legal services and support for those being crushed by their debts and harassed by their creditors. We can also help with debt settlement negotiations for an individual creditor or a group of creditors. We can be reached via our contact page or by phone at (949) 312-4226.