The Pros and Cons of the Bankruptcy Option
Being insolvent is one of the worst situations a person can find himself in. The threat of foreclosures, or losing one’s home and valued possessions looming over one’s head would cause sleepless nights. This predicament would force a person to grasp any possible solution. However, if all possible solutions fails to deliver the desired result, the last course of action is to opt for bankruptcy.
If you have tried credit counseling and you still can not pay your bills, and if you have exhausted your savings, then you should consider filing for bankruptcy.
Pros
Bankruptcy will give the debtor peace of mind, will free him from harassment of creditors and will give him a chance to have a brand new start. Stress in dealing with countless creditors will be eliminated because once the bankruptcy order is made; the appointed trustee will do the administration and the payment of the debts.
A bankruptcy stops the creditors from filing collection actions. Creditors are prevented from foreclosing, repossessing and garnishing your assets. In some states, bankrupt individuals are allowed to keep the house, the car and other possessions and a reasonable amount of cash to live by. The primary purpose of this is to lessen the risk of the bankrupt person to be bankrupt all over again.
Cons
Contrary to the notion that bankruptcy gives a distressed debtor a completely new slate, not all debts can be discharged or written off. Examples of this are student loans, unpaid taxes, and child support.
Bankruptcy will stay in on a person’s credit history for 10 years. Needless to say, this affects a debtor's future financial standing. Lenders will have to think twice before extending credit because of there being a potential credit risk. Acquiring credit cards and mortgages will be difficult if you have a bankruptcy on record.
With a bankruptcy order the debtor can expect to have all his bank accounts and credit cards closed. On a positive note, the closing of credit cards will be beneficial since credit cards could be one of the causes of the bankruptcy.
Bankruptcy records are easily accessible because they are public records which can also be viewed online. This could be detrimental to future financial dealings and employment of a debtor.
Call us today and speak directly with an attorney for a free, no obligation, consultation to see if you qualify for bankruptcy and if it is the right decision for you and your family.
Wessler Law Firm is a small family owned law firm specializing in bankruptcy law since 1982.
228-863-3686
Disclaimer: This article is meant for reference only, and is not intended to be legal advice.
For legal counsel regarding your situation, please consult an attorney licensed in your state.
