Unfortunately, most New York bankruptcy debtors see bankruptcy as a last resort after they’ve tried other options, like debt settlement. Perhaps they believe that bankruptcy is a sign of failure, even though the alternatives are usually worse. Instead of seeing bankruptcy as throwing in the towel against one’s debts, it can help to look at bankruptcy as a tool to help balance a budget.
When people’s budgets are balanced, their incomes equal their expenses, and there’s some excess income to cover future costs. Anything below that, though, and it won’t be too long before debts start rising faster than incomes. One option debtors have to balance the scales is to make more money, and unsurprisingly debtors frequently take the responsible road of finding more part-time work if it’s available. But really, how often do you see financial advisers saying, “Oh, your problem is simple, just make more money”?
They don’t say that because in the real world, asking for raises isn’t always feasible, and working extra hours will wear people down eventually. These approaches can work for some, but most people don’t have these options.
That leaves reducing the debt.
The easiest way to do that is spending less money—and you’ll definitely see financial planners recommend that. Again, for some debtors this can work. Taking public transit to work can cut costs, eating out less frequently saves money too.
But this advice also won’t work for everyone, though, leaving one of the best tools for reducing debt: bankruptcy. Bankruptcy is powerful and permanent, especially if you owe large one-time debts. If you had to put expensive medical or dental procedures on a credit card, then they can be discharged. If you had a divorce that led to substantial debts, then that too can be discharged (unless it’s money owed for child support and similar debts).
In these and similar circumstances, bankruptcy can balance budgets for debtors who can’t magically earn more money. Moreover, it will also free up income that’s being spent paying down debts. That money can go to debts that may not be dischargeable in most bankruptcies, such as student loans, or it can be saved for future expenses (and staying out of future debts).
If you are experiencing serious financial difficulties, and simply earning more money or spending less won’t make a difference, then talking to an experienced New York bankruptcy lawyer can help you use bankruptcy as a tool for balancing your budget.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney Brooklyn NY Bruce Weiner for a free initial consultation.
