No one goes into a bankruptcy lightly. Most people, in fact, will fail to see the "relief" bankruptcy can offer until after it is finished. The truth about bankruptcy, though, is that it does represent a way out for people who find themselves in a particular set of circumstances. Before making a decision that could deeply impact your life in the medium-term, it is worth looking at what bankruptcy is and is not.
First of all, bankruptcy is not for everyone. While you may feel drowned in your debts, you should take the time to see if there is a way to trim your costs and start to reliably make payments before things get out of control. With very few exceptions, creditors are willing to work with customers who make an honest attempt to pay regularly. This might entail renegotiating your monthly payments to make them more reasonable or procuring a temporary forbearance until you can start making payments again.
This can be a painful and humiliating experience for some people, especially if they are used to avoiding the situation altogether. It does not have to be this way, though. Before you sit down and make the calls, remind yourself that this is the first step to getting back on the right track. With a positive attitude, you will find that most creditors will actually be happy to work with someone who truly wants to set things straight.
However, some people are simply too far in to get back on track. Possessions have been repossessed, credit cards are maxed out and your home resembles a call center unless you disconnect the phone. You have no savings to fall back on and the amounts you owe will not reasonably be within your reach for the foreseeable future. Bankruptcy is for people in this situation.
Again, the biggest block in this step is the psychological and social concerns. Many people feel that declaring bankruptcy has to be, by definition, a public shaming, which is not true. This is a proceeding to find the best way for your creditors to close your file and recuperate their costs and for you to get on with your life. Look at it as a technical fix to a complex problem you are confronted with. Then you can move onto the details.
While individuals can file for bankruptcy on their own, this is a difficult process filled with pitfalls for the layperson. Like so many other aspects of the legal system, things may not be as simple as they first appear. A single missed filing or overlooked requirement can knock the proceedings off the tracks and damage your case. As much as a do-it-yourself approach may seem like a money saver, it may end up costing you more in the future.
Speaking of the future, bankruptcy does not have to mean a life devoid of the things you need or enjoy. While some settlements include liquidating assets to pay creditors, your attorney can help you keep as much as possible while still meeting your obligations. This may depend on using your current wages to pay back creditors in lieu of losing property you need.
Ultimately, it is important to remember that bankruptcy is not for everyone. But, for those who can really benefit from it, it should not be something to shy away from either. Instead, the truth about bankruptcy is that it can represent the light at the end of the tunnel.