What happens to your debts while you're in jail? Some companies are willing to temporarily freeze your debt while you're in prison, while others are not. If you're going to be in jail or prison for a long time, you may want to consider dissolving your debts now. If you have a spouse (and they are also attached to these debts) this could also ease some of the financial burden on them.
Why Should You Declare Bankruptcy While in Jail?
Your debts are either going to remain static or still need to be paid while you're incarcerated. If your spouse (or a family member) is a co-signer or otherwise attached to these debts, they are still going to be liable for payments.
The major downside of declaring bankruptcy is the dissolution of assets. If you don't have many assets to protect, declaring bankruptcy makes sense. The secondary downside of bankruptcy is injury to your credit score. However, this injury does start going away after a few years, disappearing entirely after seven years. If you're going to be away for a long time, this may not matter.
How Can You Declare Bankruptcy in Prison?
Declaring bankruptcy works in prison just as it works outside. You need to contact a bankruptcy attorney or a bankruptcy law firm. They will work with you to file the relevant paperwork and may need to meet with you in person to get these documents signed. The process of bankruptcy can last a few months, but during this time your creditors won't be able to come after you or your spouse for your debts.
Once the bankruptcy is complete, you'll have a blank slate to return home to. The only difference during the bankruptcy will be that your attorney will need to file a motion so that you don't have to appear in court. If you are currently in the custody of the state, this will usually be granted.
The only reason you might not want to declare bankruptcy is if your debt is non-dischargeable (primarily student loans) or if you have significant assets. However, even most assets can be protected during the process of a bankruptcy. You'll usually be able to keep, at minimum, your home and your car, and you may be able to keep multiple cars.
If you're considering bankruptcy, either before or after going to prison, you should consult with a bankruptcy attorney like those from Haven Law Group, P.C. right away.