Filing for bankruptcy is not an easy decision anyone would like as a last resort. But there’s always a bright side to it as much as there are downsides too. If you have a certified credit counselor or a bankruptcy attorney, you can understand some options that can help you make a perfect choice.
You only need to ensure you don’t rush into decisions when it comes to filing for bankruptcy. Despite the drawbacks that such a decision might come with, it might turn out to be the best decision in the long haul. Here are some of the two sides of the wedge that you need to understand beforehand.
The pros
Pride might delay you from filing for bankruptcy, as it does for many debtors. But remember, this process comes with some upsides to it too.
One of the leading benefits of bankruptcy is that you can get a discharge for many debts. Discharge means the debt being forgiven so you no longer have to be responsible for them. With some debts as bills legally waived, you can get an opportunity to start afresh.
Another upside to bankruptcy is that you can get an automatic stay. This means your creditors will be barred from any collection attempts on any debts you owe. As such, you can get an immediate stop to endless calls or letters from your creditors.
Besides, you do not risk losing all your property due to this condition. In this case, you can make the most of bankruptcy exemptions. Your bankruptcy trustees might not be able to seize these assets from you. This way, you will be able to save your home, which can be a great advantage for your family. It also helps protect your car, giving you an opportunity to continue working. As such, you will be able to keep everything under control as you continue to deal with the solving your bankruptcy process.
Filing for bankruptcy might remain on your record for as long as seven to ten years. Besides the debts being discharged, you also get an opportunity to improve your credit rating. Many debtors have managed to regain their footing on credit rating once they filed for bankruptcy.
The cons
Even though filing for bankruptcy might come with some good news, there are several drawbacks to it too. The best thing is to understand what can work best for you, despite the downsides.
Among the top problems that come with filing for bankruptcy is that this doesn’t mean you will have all your debts cleared. Some of the debts like some student loans, recent back taxes, fines you owe to government agencies as well as child support and alimony will remain.
Besides, you can keep your exempt property, but you still do not get to lose the non-exempt ones. Considering your financial circumstances, these could come down to stocks, cars, homes, bonds and such aspects.
Filing for bankruptcy is not a simple process. Even after filing, you still have to take on several tasks too. What’s more, you might end up with having your relief rescinded in case you inherit money or get a significant income.
Also, the process is not a cheap one. This could come with some filing fees, credit-counseling fees, and bankruptcy trustee’s fees. You may further need to front attorney fees, and the cost of the process might keep piling up.
Notwithstanding, you will have a stain on your credit history for up to ten years. As such, it may be quite difficult to get a loan later on. And if you get a loan or a credit card, chances are good that you will face significantly high-interest rates that come with it.
As it turns out, filing for bankruptcy is not so easy, but it’s essential if it seems to be the only resort at your disposal. Well, if you find yourself at the crossroads, you can always turn to a knowledgeable bankruptcy attorney for a consultation. The best you can hope for is coming out on the other side with an upper hand.
The process might prove not to be easy, but it is a great way to solve your bankruptcy problem. If you are on the edge regarding financial problems, this option is one of the options you can turn to if you want to regain control of the situation.
Guest post courtesy of Rilind Elezaj. Rilind is a marketing specialist at SavvySME. He has a passion for sharing things that can help businesses grow successfully