Some important facts you should know about bankruptcy

Financial challenges are part of the daily lives of Nassau County, New York, residents. Some may be facing insurmountable debts stemming from student loans, unpaid credit card charges, personal loans or medical expenses. These debts weighing down New Yorkers may not have been the result of poor decision-making. A sudden twist of fate or unexpected life changes can simply drive a person into huge debt. The only question left: Is there a way out of these financial challenges?

Yes, there is a way that can lead to a fresh start-filing for bankruptcy. Nearly one-quarter of Americans have considered filing for bankruptcy; however, many people are hesitant about it as a way to settle debts. This thinking could be a result of misunderstanding with regard to how it works and how it can help honest debtors move on with a clean slate.

Anyone from any income bracket can file for bankruptcy. However, Americans earning less than $40,000 annually are most likely to file for bankruptcy. Most Americans don’t view it as a positive action; nevertheless, it is a legitimate option, supervised by the federal court, which allows debt to be settled legally and honestly.

Debtors need to understand that student loans, outstanding federal taxes, and alimony debts cannot be discharged by filing for bankruptcy. However, debts incurred from medical expenses, credit cards and personal loans can be discharged through the process.

Bankruptcy can be filed once every eight years and a bankruptcy filing also becomes part of credit history and will be part of any credit report for as many as 10 years.

Before filing, it is imperative to speak with a bankruptcy attorney to know all the details. Failure to consult a legal expert could lead to some unexpected challenges and an unexpected outcome.

Source: Mainstreet.com, “One-Quarter of Americans have Considered Filing for Bankruptcy,” Hal M. Bundrick, Feb. 26, 2014