The Best Time to File Bankruptcy

Bankruptcy is often the last resort for people in Pittsburgh, Pennsylvania.  But there is a good argument for why most people should consider it sooner:  waiting often results in further debt accumulation, frustration and payment of credit card minimums that barely move the needle on the total debt load.  On the other hand, filing sooner often allows individuals to start repairing their credit and accumulating cash savings more quickly.  It is true that a bankruptcy filing is an adverse credit even but it paying late fees, minimum payments and penalty interest rates while living paycheck to paycheck is not a better option.

The most simple form of bankruptcy is chapter 7 bankruptcy.  In chapter 7, all of a consumer debtor’s non-exempt assets are sold and the proceeds are distributed for the benefit of the debtor’s creditors.  At the conclusion of the case, most kinds of debt are discharged.  Very often, debtors have no “non-exempt assets.”  That is all of their assets are protected by statutory exemptions preventing them from being sold for the benefit of their creditors.

Chapter 13 bankruptcy is a reorganization of debt.  In a foreclosure case, a debtor may wish to keep her house but, may not be able to catch up on the mortgage payments without some extra time.  Chapter 13 allows debtors with a regular source of income to pay some or all of their debts over a period of three to five years and, at the conclusion of that period, have most kinds of remaining debt discharged.

You can start rebuilding your credit immediately after your bankruptcy case.  Many debtors are surprised to receive credit card offers promptly after their debts are discharged.  These are not typically low interest, no fee accounts but they give debtors the opportunity to re-establish credit.

Whether financially troubled people in Pittsburgh decide to file bankruptcy when they are out of options, or do so in order to plan for their futures, it is critical that they find an experienced Pittsburgh bankruptcy lawyer.  The bankruptcy process, while fair, is not intuitive.  For that reason, it is best to take advantage of a free initial consultation with a Pittsburgh bankruptcy lawyer.

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