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Bankruptcy at the right time may stop foreclosure

It is not uncommon for Washington consumers who are facing overwhelming debts to try all kinds of remedies before considering bankruptcy. Unfortunately, most other options take a long time before relief is achieved -- if at all -- by which time actions such as foreclosure, wage garnishments and repossession may have been launched. While filing for bankruptcy requires careful consideration, there are certain circumstances in which the advantages of bankruptcy outweigh any perceived disadvantages.

Before filing for bankruptcy, consumers will want to be aware of any potential negative consequences. These include a decline in credit scores and problems when applying for credit cards or loans. The bankruptcy will remain on the individual's credit record for a number of years. Nevertheless, in a case in which a consumer's liabilities are significantly higher than his or her assets, it may be virtually impossible to catch up even if expenses are limited. Such circumstances may justify a bankruptcy filing.

While it is always a good idea to negotiate with creditors in an effort to reduce debt levels, this is often not successful. By filing for Chapter 7 bankruptcy, a trustee is appointed by the court to oversee the proceedings. Losing a job or contracting a serious illness may render a consumer incapable of earning an income for a specific period. This is also a time when filing for bankruptcy makes more sense than fighting against a spiral of mounting debt.

Filing for Chapter 7 or Chapter 13 bankruptcy offers levels of protection that are not available by any other debt relief action. Bankruptcy is an important decision to make, and Washington consumers may find it beneficial to consult with an experienced bankruptcy attorney before taking such action. A lawyer can explain how bankruptcy may prevent foreclosure and other creditor's actions. Based on the client's unique circumstances, a strategy can be put in place to achieve financial stability once again.

Source:, "Three times bankruptcy is the right decision", Dan Rafter, Nov. 16, 2015

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