If there is one bright side to 2020, it is that bankruptcy is losing its dirty word status. Unfortunately, because of its dirty word status, people burn through retirement funds, bank account and sell all of their assets, just to avoid bankruptcy. However, the bankruptcy system is designed so that people do not have to be destitute, penniless and homeless to utilize the process. When one can see this on the horizon, call an attorney because bankruptcy can provide a fresh financial start.
The under filing problem
With a fresh financial start in mind, it is a wonder how the U.S. does not have more bankruptcies each year as only a fraction of those who qualify and who could benefit from it actually file for bankruptcy. However, please do not let the fear or stigma stop what is the best financial move for some, especially in light that nearly 14% of U.S. households have more debts than assets. But, fewer than 1% file for bankruptcy every year, according to the Federal Reserve Bank of New York estimates.
The current lull in bankruptcies
Bankruptcy filings have dramatically dropped this year to around 60% of where they should be, but experts expect this to only be a lull in bankruptcies. After all, many bankruptcy courts have been closed for months. Though, as government aid is now running out and bankruptcy courts are opening back up, these same experts expect filings to go up, as they should.
The fresh financial start
In most cases, after the bankruptcy process, one keeps their cars, home and property. This includes wedding rings, professional tools, closing and even equity. Plus, it stops collection calls and proceedings immediately. Moreover, while a bankruptcy remains on a credit report for 10 years, one’s actual credit score begins to recover almost immediately after one files. And, FHA and VA mortgages are still possible after two years.
New Port Richey, Florida has been especially hard hit, which is why bankruptcy can be such an important tool. When one finds themselves treading financial water, or perhaps, sees the financial sharks getting closer, call a bankruptcy attorney immediately. Bankruptcy is simply a tool, nothing more.