Many Consumers Lack Funds to File Chapter 7 or 13 Bankruptcy

Many residents in Connecticut and all around the country are anxiously awaiting their tax refunds, if they were so fortunate to receive one. While some taxpayers plan to use their refunds to go on vacation or remodel their homes, others may decide to save the money or use it to pay off some bills. However, there are individuals who need the refunds to help them take the steps toward getting their finances back on track. This group of people has waited for the refunds to file for a Chapter 7 or Chapter 13 bankruptcy because they could not afford it before.

Reports show that bankruptcy filings increase during this time each year, indicating that people use their tax refunds for this purpose. When individuals do not have the funds to file for bankruptcy, their situations often become even more grim. There are areas where phony filings occur or payment plan scams are offered, leaving consumers in worse financial shape.

The American Bankruptcy Institute is made up of thousands of professionals in the legal community. This group has advocated for changes to the bankruptcy system, including lobbying for Congress to amend the laws associated with it. One major suggestion was to allow consumers to pay for the bankruptcy over a period of time, rather than paying the entire amount at the start of the process. Since many are already struggling with cash flow, this requirement becomes a deterrent to those who need to file the most.

Changes to the bankruptcy process may take some time, yet it may be in someone’s best interest to file for Chapter 7 or Chapter 13 at this time. A Connecticut bankruptcy attorney can help individuals understand the difference between the two types and decide on the best course of action for them. An experienced lawyer will work with clients to get a fresh start on their finances.