Many people have found themselves in financial situations that can sometimes seem hopeless. There are many different options to those people that a want to remove their debt. However, sometimes the only option is filing for bankruptcy.There are so many pros and cons to bankruptcy that one can look at before making a final decision.
Bankruptcy can change your life forever, it cannot only harm your credit, but it could be the short solution to improving an individual’s life. Bankruptcy might be the solution to help you not lose your larger assets, like you car or home. Since filing for bankruptcy is such a long-lasting and permanent decision it is important to examine all the pros and cons of bankruptcy. After knowing the facts then you will be able to decide it, bankruptcy is the best option for your situation.
Credit Cards and Creditors
One thing that most everyone knows is that you will no longer have all your credit cards, unless you have already paid them off prior to filing for bankruptcy. This can be a big con to many people, as well as the waiting process that you have to go through before you can get any credit in the future.
For many people it is a pro that during the process all of your accounts in collections will be frozen. No further action will be taken on you from your creditors. This is beneficial to those going through foreclosures, repossessions, negative phone calls, as well as any garnishments that you maybe going through. In addition, using a lawyer can help shelter you have dealing with many of the questions that creditors will have.
Some of the reasons that one should really look at all the pros and cons of bankruptcy is because many of the consequences will happen in the future.
For example, it will be nearly impossible for an individual to receive a mortgage until you are at least five years out from judgment. It is also important to note that the bankruptcy will remain on your credit report for at least 10 years. Just as getting a mortgage is difficult, it can make it hard for you to gain credit, life insurance, or get a job.
However, for both these options there is a positive. Each type of bankruptcy that you file has exemptions that can allow you to keep some of your major assets like a home or car. This can stop you from having to worry about getting another loan or wind up without a home.
There are both pros and cons with bankruptcy and the debts that you have. However, there are only certain debts that can be erased by filing bankruptcy.
Not all debts can be removed during the bankruptcy process. Two of the major debts that an individual cannot be release are student loans and back taxes due.
Even though you cannot have your student loans discharged, all the lenders will no longer be able to call with harassing messages. You will be able to begin rebuilding your credit score as soon as your bankruptcy has been completed.
Bankruptcy can be looked as a sign of admission, defeat, or embarrassment. Your name will be in court records as well as it can appear in newspapers, this can be considered embarrassing to many people. You will have to tell your story to a judge regarding your entire financial situation. It is important however, to remember that most judges have heard stories that are worst than your personal situations.
It can be complicated if you are sued rather than filing for bankruptcy. If you are sued by your lenders then your car can be repossessed or your home can be foreclosed on.
There are several things you might want to remember before making a decision.
- Filing for bankruptcy can release you from the need to handle your creditors and their phone calls.
- You will be able to avoid any lawsuits by filing for bankruptcy. You will also have your foreclosures paused, you can no longer be sued after you file your bankruptcy position.
- Bankruptcy can harm you are the ability gain no credit, insurance, as well as a jobs. You will also have trouble getting any mortgage for between 7 and 10 years after your bankruptcy is complete.
There are so many reasons that a person can find themselves in financial troubles. It is true that the cost of living is rising, the unemployment is rising, and poverty is rising. If you are facing insurmountable debt troubles then filing for bankruptcy may be your only way option. It can be very stressful for anyone involved in the negative financial situation. Knowing the pros and cons of bankruptcy can help a person decide if it is the best option for you.