15 Mar Advantages and Disadvantages of Bankruptcy
While many will argue that bankruptcy brings the end of the world, the truth is, that there is light at the end of the tunnel. Bankruptcy can be a great opportunity to restart your finance, and learn how to manage them better in the future. Baby Boomers Financial rounded up a list with some pros, as well as cons, if you’re filing for bankruptcy. Check them out.
Read our relevant blog post: “What Is Bankruptcy?”
There is a possibility that some of your owned properties will not be covered under the bankruptcy claim. Therefore, the court can judge their sale, in order to pay back some of your debt to creditors.
Expect some of your debts to be non-dischargeable, like liens, student loans, child support, tax debts, and more.
It’s more likely that you’ll lose your tax refund rights from state or local government.
It will follow you for many years, making it difficult to have control over your future financial decisions. It can stay listed in your credit report for up to 7 or 10 years, and you’ll struggle with your credit applications. Additionally, most of the creditors have an immediate response to your claim, and automatically cancel your existing credit cards. And also, don’t be surprised if you’ll have difficulty to get approved for a mortgage, for many years after your filing.
You may face trouble to find a job or rent a house and/or an apartment, as many employers or landlords will take a serious consideration over a recent bankruptcy filing.
Bankruptcy can be an embarrassing and a very emotional situation for most people. Therefore, it also has impact to your prestige, as well as your psychology.
You’ll probably be qualified to discharge your obligation to pay back your debts, falling under the dischargeable category. And that means that creditors will not have legal right to demand their money, or repossess your properties. Additionally, they cannot sue you for your debt, and not even call you, or evict you.
Even though your bankruptcy filing will remain listed on your credit report for 7 or 10 years, there is light at the end of the tunnel. Many debtors took the chance and the responsibility to build a new credit score and make a fresh start.
If you’re filing for personal bankruptcy then you are obliged to take credit counseling courses. Therefore, you have the opportunity to make it right and improve your financial habits. Also, you will educate yourself around the subject, while at the same time, you’re rebuilding your credit.
Yes, bankruptcy it’s not a situation that anyone wants to put himself in, but hey, it happens and it’s not the end of the world. Let a reputable credit repair company like Baby Boomers Financial to help you with your credit score struggles. Contact us today, we’ll be glad to help.