During a recession, people from all types of economic backgrounds are forced to consider bankruptcy as a realistic option. The thought of having to file for bankruptcy often invokes feelings such as failure, irresponsibility, guilt and regret. While at first people may focus on the doom and gloom of their financial outlook after a bankruptcy, these feelings will fade once they face their fears. Filing for bankruptcy in Colorado not only helps to defeat debts, but it can also help to make honest, hardworking people whole again.
Hard Times Causes Increased Need
One sign of the bad economic times is the increase in all insolvency filings, which are the highest since the 2005 bankruptcy law reforms were announced. According to Automated Access to Court Electronic Records (AACER), overall bankruptcy filings in the U.S. increased 32 percent from 2008 to 2009. Consumer filings during the same period increased by 32 percent and business filings went up by 40 percent.
For Colorado, the percentage that bankruptcies increased over the last 2 years was greater than in the U.S. as a whole. AACER data indicates that 34 percent more people and businesses filed for bankruptcy in 2009 than in 2008. The consumer filings in Colorado rose by 40 percent and business filings increased by 47 percent. Even with an increase in bankruptcies last year, chances are that almost no one wanted to file – they needed to file.
No One Is Immune
In today’s poor economic climate, it is not just certain life events, such as divorce, death of a spouse and serious accidents or injuries, which are driving people to the doorsteps of bankruptcy lawyers. The rise in unemployment and the severely crippled housing market are two of the main reasons individuals have to file for bankruptcy these days. Even people who are still employed and barely making ends meet may suffer a reduction in hours or a pay cut, which may push them over the edge and into bankruptcy.
These factors impact not only those in low socio-economic classes. Both blue- and white-collar workers alike must also consider bankruptcy as their best available option for debt relief. Rising credit card interest rates and mortgage companies unable to work with homeowners may also impact persons across the economic spectrum. With the rise in business bankruptcies, further complications, such as job loss and the collapse of small businesses, may compel big spending owners and executives to enter the realm of bankruptcy.
No One Wants to File
The general consensus among bankruptcy attorneys is that they never see clients who truly wanted to file bankruptcy. People tend to feel a moral duty to pay back the money they have borrowed, and they think poorly of themselves when they need to file bankruptcy to protect themselves and their families. However, once people face their fears and understand what brought them to the point of bankruptcy, things change.
When people realize that filing for bankruptcy is a legal right they can exercise to defeat their debts and gain relief from collectors, they breathe easier. The purpose of filing bankruptcy is to help clear away past debts by working within the law, so that both debtors and their creditors can move forward. It is possible to rebuild credit and purchase property after a bankruptcy is finalized. Most people can bounce back from a bankruptcy over a minimal amount of time with enough patience and a decent income.
You are Not Alone
Even if you have to file bankruptcy in the near future, or have filed in the past, you are not alone. Recently, many people have had to consider either Chapter 7 or Chapter 13 debt protection just to guarantee that they can make it through this tough economy. Chapter 7 bankruptcy filers are discharged of all debts with certain limited exceptions. Chapter 13 filings, which tend to be more complicated and expensive, allow people to repay their creditors according to a negotiated plan that extends from 3-5 years.
You are also not alone because you can always choose to contact an experienced bankruptcy attorney in your area to help you consider the best filing option for you. A bankruptcy lawyer can help you release the stress of mounting bills by facilitating the bankruptcy process in a smooth and orderly way. Your attorney can stop bill collector activities, verify qualification for a full discharge of debts under Chapter 7, negotiate a partial discharge and repayment plan under Chapter 13, protect your assets based on exemption laws, and work with you generally to allow you to move on with your financial future relieved of overwhelming debt forever.
