Declaring bankruptcy is a difficult situation as it can impact your personal life and reputation in the long-run. However, when you reach this stage, you have no options, and you can only complete the bankruptcy claim through a legal process. It is vital to have a qualified and experienced attorney to help you with the bankruptcy claim. The attorney will help you prevent a significant impact on your personal life and belonging such as losing your home, car and other assets.
Before you decide to file for bankruptcy, make sure to think it through, consult with an attorney and talk to your creditors to find a workable solution. Of course, the bankruptcy claim will relieve you from all your debts and remove the stress of repayment. It will stop the creditors from constantly hassling you for payment as well. Most importantly, it will give you peace of mind knowing that this issue is put behind you. Filing bankruptcy is probably the right solution for you when facing a debt that you will never be able to pay.
There are many pros and cons of bankruptcy, but the advantages overweigh the disadvantages. Seeking professional advice from an experienced attorney is the first step to resolving your financial setback amicably. They can help prevent losing your property or vehicle, and even stop the stressful phone calls you receive from creditors.
The pros and cons of bankruptcy are:
1. Relief from creditors
It is a huge relief when the creditor stops calling you for payments. Once the bankruptcy is filed, creditors or bill collectors are ceased from contacting you regarding any outstanding debt. This includes threat letters, harassing phone calls and even filing a lawsuit against you and your organization.
2. Emotional and stress relief
For a healthy well being and peace of mind, it may be essential that you consider claiming bankruptcy. This decision removes all stress and anxiety associated with the debt or dealing with angry creditors. You no longer have to feel unsafe with all the threatening communications directed your way or even be terrified to deal with many lawsuits.
You attorney will also contribute to your stress and anxiety relief by guiding you through the process of filing your bankruptcy correctly. They will communicate with your creditors on your behalf until a conclusion is reached.
3. Prevent forced asset acquisition
The biggest concern when filing bankruptcy is the possible forced acquisition of your assets, including property. This can be prevented if you have a qualified attorney supporting you on this matter. The attorney has the experience and knowledge to stop any foreclosure or vehicle repossession.
The attorney works with the relevant parties to reorganize your payments. He/she finds a solution where you can retain your property and vehicle until you recover from your financial setback.
4. Removal of debts owing
The significant advantage of filing bankruptcy is the discharge of all your debts owning. It gives you the opportunity for a fresh start both financially and emotionally. The attorney will help to remove all debt obligations and even stop creditors from annoying you. Filing for bankruptcy legally waives all debts owning.
5. A poor credit history
Even though there are many pros of bankruptcy, there are certainly some disadvantages and downsides too. The problem with filing bankruptcy is that you will have a weak mark on your credit score, which will impact you when seeking financial support in the future. A bankruptcy claim is recorded on your credit files for at least ten years, making it very difficult for you to secure any credit in the long run.
If you do manage to get a loan, it might be one where you have to pay a very high interest because of your debt history.
6. Long-term consequences
You cannot avoid the ramifications that come with filing bankruptcy. You may not be able to use your credit card, ask for credit or even secure a loan. This will make life difficult when you are traveling and need to book a hotel or rental with a credit card.
You will have to make several lifestyle changes after claiming bankruptcy, which makes life challenging.
7. Ongoing procedures
The claim of a bankruptcy does not stop once you are successful. It is not a one-step process. A lot of ongoing procedures are involved. This includes specific tasks and may even require small ongoing payments depending on the resolution reached by the courts.
8. Costs of filing bankruptcy
Even though you are claiming bankruptcy, you may still be obligated to pay for the attorney fees and other costs such as the bankruptcy trustees fees and credit counselling fees.
The charges you have to bear will depend on the complexity of your case. The only positive side to this, is that the costs will probably be less compared to restructuring your debts to pay creditors in full.