Bankruptcy from Poor Spending Lawyers in Honolulu
How Poor Spending Got You Here
Do you ever look at your budget and just don’t understand how it
reached this point? Bills are piling up all around you, and there is just
no way they’re all going to be paid off. You have so many, you can’t
even figure out what is due (and when) anymore. You swipe your credit
card at the grocery store and fear it will be rejected.
These are telltale signs of someone that has allowed their budget to get
out of control. It usually starts off honest enough — a missed credit
card payment here or spending outside your budget there to get that car
you’ve always wanted — but it eventually snowballs. Eventually,
it snowballs to financial ruin.
Poor budgeting and spending is one of the leading causes of bankruptcy
in the United States. Many of us are hardworking people, but budgeting
isn’t easy. Even when we think we have everything organized how
we want it, there is frequently something that gets in the way. Life is
difficult to predict.
Unfortunately, life can also be rather unforgiving. Small mistakes are
not forgiven very easily. There are consequences for every action, and
when you can’t afford to pay for something, that consequence is
As debt from poor spending habits builds up, it eventually reaches the
situation listed above, where it feels that there is no possible way to
escape from that debt. When you are in this situation, you may look to
seek bankruptcy as an escape.
Bankruptcy May Be Your Second Chance
Life does not give second chances, and as a result, we’ve had to
build them into our systems that we have created. One of the largest myths
of bankruptcy is that it is an end to someone’s life. All of your
possessions are taken away from you, and you are kicked to curb with nothing
but what’s in your pocket to survive on. This is not true. In reality,
bankruptcy is an opportunity to see your debts erased.
When you file for bankruptcy, you will have this happen:
- Freed from debts
- An opportunity to start over
- No more financial strife
This doesn’t mean that life is going to be easy and you will suffer
no problems at all. Your life will still see many of the same challenges
that you were facing before, but you will no longer have debts hanging
over your head and controlling every decision in your life.
This, of course, doesn’t come without consequences. When you go into
bankruptcy, there are going to be costs. What these costs are will largely
depend on what kind of bankruptcy you had to file for.
Chapter 7 Bankruptcy
If you file for
Chapter 7 bankruptcy, then that typically means you have too much debt to possibly pay off
in a reasonable amount of time. This is the most common form of bankruptcy
out there and is where a lot of the misconceptions about bankruptcy come from.
When you file for Chapter 7 bankruptcy, your assets will be liquidated
so you can pay off the debts to your name. This usually results in losing
items such as:
- Extra houses
- Extra cars
- Valuable property
You won’t lose everything, however. Some of the things you keep when
you are going through bankruptcy include:
- The equity in your home up to about $25,150 per person filing
- Tools of the debtor’s trade or profession, up to a certain value
- Motor vehicles, up to a certain value
- Reasonably necessary clothing
- Necessary household goods and furnishings
- Household appliances
- Jewelry, up to a certain value
- Home equity (a portion)
- A portion of unpaid but earned wages
- Public benefits, including public assistance (welfare) and Social Security
Once your assets have been liquidized and you have finished the bankruptcy
process, you will earn the opportunity to start over — no debts
to your name and a chance to budget more properly.