Consequences of Bankruptcy. Perhaps the most well-known consequence of bankruptcy is the loss of property. As previously noted, both types of bankruptcy proceedings can require you to give up possessions for sale in order to repay creditors. These types of loans can aggregate multiple high-interest, costlier debt into a single, lower. Consequences of Bankruptcy. Bankruptcy can wipe the financial slate clean and allow people to get a fresh start. For those who are drowning in debt, whether it be from credit card debt, medical debt or any other debt that is threatening both the stability of their financial situation and their life, bankruptcy can be a very positive thing. As with any legal process, bankruptcy is a complex issue with both positive and negative consequences. Anyone considering filing for bankruptcy should consider all the possible outcomes before taking this step.
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In re Byron Kinney , 51 B. Phillips , Slip Op. Richmond Cnty. In re Gootnick Family Trust, Fed. In that case, bankruptcy was filed for the sole purpose of delaying a state court trial. Similarly, in Esien v. Curry , 14 F. Further, lack of good faith has been found where the debtor misrepresents claims in their petition, files incomplete schedules, manipulates the bankruptcy system to avoid a past waiver of discharge, or where a voidable transfer exists.
In re Nelson , Fed. In conclusion, a single bankruptcy filing made for the purposes of avoiding a trustee sale does not appear to constitute a bad faith filing. A lack of good faith has been found where the debtor has filed multiple times to avoid a trustee sale.
Similarly, where a debtor filed to frustrate other court proceedings or intentionally submits inaccurate documents the filing has been held in bad faith. However, where bankruptcy is filed once and for purposes other than discharge per se , it has not been held to be in bad faith. If you have questions or would like to learn more , please visit our bankruptcy attorney services section.
Our attorneys are waiting to assist you. Click here to cancel reply. Multiple Bankruptcy Filings. We offer a free consultation with our bankruptcy attorneys. Many types of debt can be eliminated, allowing you to start over and plan for your budget, free of unmanageable debts. Over time, if you remain free of debt and pay your bills on time, your credit score will likely improve although it will take a hit, initially.
And, of course, the best thing of all is that you can relax in the absence of the debt that was so difficult to pay off. While there are positives and benefits to declaring bankruptcy, there are also some important realities that you should think of before you start the process to file:.
Yes, it is a good idea to hire a bankruptcy lawyer if you are contemplating filing for bankruptcy. The lawyer can discuss your circumstances, what type of bankruptcy suits your situation, and can review the positive and negative consequences with you in detail.
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