In recent years, the recession in the United States has been particularly tough on consumers and businesses alike. In fact, times have been so difficult that 23 percent of American households thought about filing for personal bankruptcy in recent years. Further, 18 percent of households actually did file for bankruptcy. Those who are most likely to think about bankruptcy are those in the income bracket of less than $40,000 per year.
Bankruptcy can be employed by New Jersey residents to successfully cancel out credit card debt, personal loans and medical bills. Bankruptcy can also help Americans get a fresh start on a new life free of large debts that they were formerly unable to pay. Indeed, for many, bankruptcy can be immeasurably helpful and positively affect all areas of their lives.
Still, before New Jersey residents actually follow through with bankruptcy, they must take an inventory of debts to discover if bankruptcy will serve to eliminate the worst of their obligations. For example, Chapter 7 bankruptcies will not discharge alimony debt. Federal taxes and federal education loans also cannot be eliminated by such proceedings in most instances.
There are also some negative aspects of bankruptcy, which consumers must consider before filing. For instance, Americans can only receive a discharge for a Chapter 7 bankruptcy once every eight years. Also, a Chapter 7 filing may remain on one’s credit report history for as long as 10 years.
The positives and negatives of personal bankruptcy must be weighed by all consumers before they consider going through with the process. For some, the process can be very helpful and financially healing. For others, a less complicated approach toward debt relief, budgeting and debt management may be a more advantageous solution to their problems.
Source: mainstreet.com, One-Quarter of Americans have Considered Filing for Bankruptcy, Hal M. Brundick, Feb. 26, 2014