Personal bankruptcy can be an effective way for people dealing with financial challenges to get rid of paralyzing debt. Many people have compared it to a reset button for people looking for relief from overwhelming debt. Still, the decision to file for bankruptcy is a major life decision for Wayne County residents, and it is a good idea to consider a number of factors before taking the plunge.
The first thing to consider is alternatives to personal bankruptcy. Bankruptcy is just one of a number of possible ways to deal with debt. In order to get a clear view of your situation, it may be worthwhile to take a close look at your finances, including the nature and sources of your debt and the possible consequences of a number of actions. You may find that there would be no serious consequences to not filing for bankruptcy. You may also find that negotiating with one major creditor may be more effective and less hassle.
You also will want to consider the type of bankruptcy you wish to file for and whether you are eligible for it. Chapter 13 bankruptcy, also known as wage-earner's bankruptcy, can be helpful for people with steady incomes who want to pay part of their debts while still benefiting from having eligible debts wiped out after the end of the repayment period. Chapter 7 bankruptcy results in a complete liquidation of eligible debts sooner, but not all consumers will be eligible for it.
You will want to check to see whether the debt in question can be taken care of in a bankruptcy. For example, child support balances, taxes and student loans often cannot be discharged in a bankruptcy. Also, you will want to investigate what will happen to your house and car if you file for bankruptcy. These can be lost in bankruptcy under some circumstances.