Filing for bankruptcy is a major event, and it is not something to take lightly. Instead, you should evaluate your options before filing, as this helps you make the right decision. It is also helpful to compare and weigh the pros and cons of filing for bankruptcy. Here are some of the pros and cons to consider as you evaluate your options.
The Cons of Bankruptcy
If you decide to file for bankruptcy, you can expect to face a few consequences. Fortunately, the consequences are temporary. The first is a ding to your credit score. Your credit score will decrease from the bankruptcy posting to your report. However, with some work, you can improve it rather quickly if you try.
The second consequence is trouble getting approved for loans. The bankruptcy posting on your credit report might initially create challenges getting loans and credit lines, but this is also temporary. Within a couple of years, you should have no trouble getting a loan.
The other downside to bankruptcy is that it might not relieve you from all your debt. Bankruptcy has limits, so make sure you know how it will help before filing.
The Pros of Bankruptcy
Now that you understand the main drawbacks and disadvantages of bankruptcy, you can explore the positive things it offers. First, bankruptcy provides relief from creditor harassment. If you want your creditors to stop calling you, file for bankruptcy, as this ends all the calls and letters.
Next, bankruptcy provides relief in several ways. First, if you use Chapter 7, you will receive a discharge of your qualifying debts, leaving you with zero balances. If you use Chapter 13, you will get time to repay your debts in a way that you can afford.
Bankruptcy also provides a way to protect your assets if you file for Chapter 13, and Chapter 13 also helps you keep your house if you are about to lose it to foreclosure.
Both branches of bankruptcy provide a chance to restructure or eliminate your debts. They offer a fresh start, and they give you a chance to start over. If this is what you desperately need, you might want to consider Chapter 7 or Chapter 13.
After weighing and considering the pros and cons of bankruptcy, you might know if you should file. If you believe that filing for bankruptcy is the right thing, contact a bankruptcy attorney to get started.
