The Pros and Cons of Bankruptcy
Nobody wants to face the situation of having to file for bankruptcy, but an increasing number of people are forced to consider this option in these troubling times. The rising cost of living and decline of the job market have made the present era one of the most difficult financial periods in modern American history. The level of unemployment and poverty that is being experienced throughout the country is the highest ever since the Great Depression, and numerous people are getting into debt problems that they are unable to overcome.
If you are one of those who are facing insurmountable debt problems, filing for bankruptcy is perhaps the only solution to your financial woes. Declaring bankruptcy can be very distressing for you and your family, but the consequences of not doing so can be much worse. It is important that you consider all the advantages and disadvantages of filing for bankruptcy, so that you will know if it is the best solution for you. You have to put aside your own feelings of failure and inadequacy, and make the decision based on the positive effects it will have on your family.
Bankruptcy may be the most dreaded financial decision that you have to make in your life, but it can certainly give you some peace of mind. It can free up money that will otherwise go toward the payment of debts, giving you more money to spend on living necessities. Declaring bankruptcy does not solve all your financial problems, and it comes with a price as well. Here are the pros and cons of filing for bankruptcy:
• Bankruptcy gives you an opportunity to start anew. You can rebuild your financial life after you file for bankruptcy.
• Bankruptcy prevents your creditors from harassing you. Once you have declared bankruptcy, your creditors are legally required to stop all their attempts to collect money from you.
• Bankruptcy relieves you of the responsibility of having to deal with your creditors. All dealings with your creditors will be handled by your bankruptcy attorney.
• Bankruptcy helps you avoid lawsuits. You cannot be sued by your creditors after you have filed a petition for bankruptcy.
• Foreclosures and repossessions will be frozen after you declare bankruptcy. Any attempt to foreclose or repossess your home or car has to be discontinued.
• In most states, people who file for bankruptcy are allowed to keep their primary place of residence. Some states allow bankruptcy filers to retain assets that are required for making a fresh start, including primary residence, vehicle, and others.
• Bankruptcy gives you more time to pay your non-dischargeable debts.
• Bankruptcy affects your ability to get credit, insurance, or even a job.
• Bankruptcy makes it more difficult for you to secure a mortgage for a certain period of time.
• Your bankruptcy status will be shown on your credit report for ten years.
• After filing for bankruptcy, you will lose all the credit cards that you have not paid off.
• Bankruptcy does not discharge certain types of debts, such as taxes, student loans, and family support.
Posted in Article