BANKRUPTCY: GOOD OR BAD?

First off, it is extremely crucial that you understand the different types of bankruptcies before you even consider filing. You should look to avoid filing bankruptcy if possible.

Bankruptcy holds many other benefits besides the automatic stay for people in deep financial trouble. The other obvious advantage is that your debts will be wiped out due to another court order called the discharge. The discharge and the automatic stay are the twin towers of bankruptcy. 

**Before you declare bankruptcy, you may want to consider meeting with a financial counselor to see if they can help you regain control of your finances. It is also important to note that there are non-dischargeable debts.

Bankruptcy Benefits:
The discharge occurs at the end of your case and states that your debts have been wiped out and your liability to those debts had been forgiven. You can $100,000 in credit card debt that will be discharged.

Bankruptcy also gives peace of mind. Few things in life cause more marital strife and personal stress than money problems. Bankruptcy, with its chance to start new, get creditors of your back via the automatic stay, wipe out your debt and create disposable income, will help you to get along better with your mate and sleep better at night.

Bankruptcy Disadvantages:
The effect on your credit report.
Most items stay on your credit report for seven years. A bankruptcy stays on for 10 years. Bankruptcy is one of the most impacting things that hurt credit.

The effect on future credit.
Filing bankruptcy does not mean you will never get credit again. What it does mean is that the credit you do get will be more expensive. For example, although you may be able to get a car loan at 10% interest today, the same loan will cost around 20 percent after you file.

Loss of property. In a few cases, a person may lose some of his property to the bankruptcy trustee. This happens only when the debtor files w/o the assistance of an attorney, has a bad attorney, or owes too much property.

You especially want to make sure that you will be able to protect your assets when you you file. Each state has different laws and limits regarding the amount of property a debtor can keep when he files bankruptcy.

Filing Bankruptcy
How to File Bankruptcy
Effects of Having Bad Credit
Bankruptcy FAQ
Importance of Credit After Bankruptcy
Credit Cards After Bankruptcy



 


 

 

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