Is Bankruptcy the Best Solution For Your Financial Woes?

In the current economy, the news reports are painting a gloomy picture for the near future with job losses mounting and many individuals and families sinking deeper into debt. Who would have thought that the 2007 housing market collapse would have such far reaching financial effects? Companies that have been in business for decades are closing their doors and laying-off long time employees. One event, the housing market collapse, has resulted in almost catastrophic consequences for thousands of people from all classes, including the rich.

Fortunately, history has shown us the economy has cycles of ups and downs and cycles of stagnation with the current economy being no different. Until that time in which the economy rebounds, people will need to find innovative ways to weather the financial storm. Some will decrease the amount of money spent each month on luxury items such as going out to eat, vacations, movies and other things that can be eliminated to tighten the belt on the family budget.

However, some people will have no choice but to consider filing bankruptcy. In cases where bankruptcy is considered, it should only be the choice of last resort when there are no other options available. People that find themselves overwhelmed by creditor phone calls and the possibility of court ordered judgments, then bankruptcy may be the only option.

Court ordered judgments allow creditors to garnish wages, a percentage of the debtor's paycheck each pay period. Judgments also allow the creditor to levy bank accounts which forces the bank to turn over all funds available the day the bank levy is received. Creditors can also file liens against any property owned by the debtor which when sold, the money will be turned over to the creditor up to the amount of the civil judgment. In some cases, depending on in which state the debtor resides, property can be forced to be sold to pay the debt.

In cases such as these where a judgment can be awarded in favor of creditors, bankruptcy is a viable option. Once a judgment is awarded to a creditor, they can enforce the judgment by any means allowed by the court as stated in the examples above. Garnishment of paychecks and bank levies make it very difficult to function financially since money can be removed from a bank account at anytime since the debtor is never aware when the creditor will submit a levy or garnishment.

Filing bankruptcy takes serious thought and it is recommended to meet with a financial advisor or tax attorney before filing bankruptcy

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