Bankruptcy Pros & Cons
If you’re wondering “Is Filing Bankruptcy Right for Me?”, we know that the decision to file bankruptcy can be a difficult one.
If you’re at the end of your financial rope and facing foreclosure, repossession and creditor harassment, bankruptcy can be a powerful tool.
Is bankruptcy the right option for you? Every case is different. You can evaluate the benefits of the bankruptcy chapters with a bankruptcy attorney.
Connect with a local bankruptcy attorney today for a case evaluation–simply fill out the form below to take the next step.
Pros & Cons of Filing Bankruptcy
Con: Bankruptcy may ruin credit, and a bankruptcy filing can stay on your credit report for up to 10 years.
Pro: Most people who turn to bankruptcy have a history of missed payments, defaulted accounts and creditor actions like foreclosure that leave them with a very poor credit score when they file. Filing bankruptcy gives you the chance to rebuild credit and improve your credit score without the burden of debt. And while a Chapter 7 bankruptcy may stay on your credit report for up to 10 years, you’ll have the opportunity to strengthen your credit score after filing by using credit responsibly.
Con: By filing bankruptcy, you may lose valuable property.
Pro: Most people who file bankruptcy have their assets protected by the bankruptcy court’s exemptions. These exemptions vary in each state, but generally may include your home (homes in bankruptcy), a car needed for work (cars in bankruptcy), household items, clothing and other necessities. In addition, if you are facing foreclosure or repossession, filing bankruptcy may help you keep your home or car.
Con: You may lose your credit cards after filing bankruptcy.
Pro: It’s very likely that credit cards contributed to your current financial situation. Learning to live without credit cards is a difficult but important step in life after bankruptcy.
Con: You will not be able to file bankruptcy again for 6 years–and something even more devastating may happened during that time.
Pro: Filing bankruptcy may give you the chance to take control of your financial situation and possibly start building up savings. If you chose to file Chapter 7 bankruptcy and later encounter a financial emergency, Chapter 13 bankruptcy may be an option. If you chose to file Chapter 13 bankruptcy and encounter a financial emergency during your bankruptcy plan, the Bankruptcy Trustee may be able to assist you in meeting your obligations.
Con: The new bankruptcy laws make it more difficult to file bankruptcy.
Pro: Bankruptcy is still an option for those who need it most. The new laws are design to prevent abusive filings, such as multiple filings in a short period of time. However, for those struggling with high bills and little income, bankruptcy remains a powerful tool.
Con: Not all types of debt can be included in a bankruptcy filing.
Pro: Some debts, including student loans, alimony, child support, and certain tax obligations, are not dischargeable in bankruptcy. However, filing bankruptcy may eliminate other debts and make these payments more affordable.
Con: A bankruptcy filing becomes part of the public record and can be discovered by anyone.
Pro: The same is true to foreclosure, creditor lawsuits and other judgments. Bankruptcy allows you the chance to face these issues on your terms. In addition, bankruptcy law prevents employers from discriminating against employees or potential employees who are debtors in a bankruptcy case.
Con: Bankruptcy is an admission of defeat and irresponsibility.
Pro: Which is more irresponsible: taking action to resolve outstanding debt issues through a court of law, or continuing to ignore the financial mess you have created and racking up more and more debt? Millions of Americans have sought bankruptcy relief because bankruptcy provides a second chance.
Con: Walking away from debts may be against your morals or ethics.
Pro: If you have a moral or ethical desire to fulfill your debt obligations, bankruptcy may still be an option. Chapter 13 bankruptcy creates a debt repayment plan based on what you can afford to pay. You will not be walking away from any debts, simply creating a more sustainable way of paying them.
If you are unsure if bankruptcy is right for you, you can get help today. Simply fill out our free case review form and connect with a bankruptcy attorney in your area for a free case review.