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Personal bankruptcy for those with assets and income to protect

A common assumption about those who file for bankruptcy in Cuyahoga Falls may be that they just don’t have enough money to pay their debts. After all, how could one fall behind on one’s debt payments if he or she has a steady income coming in? However, the truth about those seeking bankruptcy protection is much less black and white. Studies done by the Office of U.S. Courts show that in 2012, the average monthly income if those who filed for Chapter 7 bankruptcy was over $2,700. Those same people also had, on average, almost $116,000 in total assets to their names.

These numbers shed light on a seemingly shocking truth about personal bankruptcy: those who file tend to do because they have assets and income that they need to protect. Both a Chapter 7 and a Chapter 13 bankruptcy will put a stop to all collection activities. Thus, those facing a pending debt judgment and/or a potential wage garnishment may view personal bankruptcy to be a better option than having a good portion of their monthly income taken away.

This decision should not, however, be taken lightly. The consequences of filing for bankruptcy can be significant. A bankruptcy will remain on one’s credit report for at least 10 years. Plus, should one again experience financial struggles immediately after having filed for Chapter 7 bankruptcy protection, the option to re-file will not be available to him or her again for another eight years.

Yet for many, a general lack of options may make bankruptcy the most realistic choice when it comes to settling their debts. Those who feel as though they are in this position may wish to speak with a local bankruptcy attorney to see what their options are.

Source: Fox Business “Debt Judgment May Trigger Bankruptcy ” Fred O/ Williams, May 07, 2014 

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