If you found this page, you are likely looking for the advantages and disadvantages of declaring bankruptcy. If you are, you are not alone. We have many visitors asking about what the benefits and disadvantages of declaring bankruptcy are. To clear this question up for you, we have put together a detailed summary covering the advantages and disadvantages of declaring bankruptcy. Read more below to find the answers you are looking for.
Advantages – The Advantages And Disadvantages Of Declaring Bankruptcy
When you are thinking about the advantages and disadvantages of declaring bankruptcy, the first thing you should consider is the advantages. Although declaring bankruptcy is something that you should aim to avoid, there are cases where a situation is dire enough that declaring bankruptcy will provide you with a better solution than the hole you are in now.
- All collections are stopped when you declare bankruptcy.
- You lose your credit cards and other lines of credit – which is likely how you got into this situation in the first place.
- The sooner you declare, the sooner you can work towards recovering from it.
- Declaring for bankruptcy will prevent bill collectors from harassing you.
- It’s not the end of the world. Think of it as a fresh start.
- Many states will allow you to keep your car, home, and other items deemed essential for living. The specifics will vary state to state.
Before you decide to take the plunge and declare bankruptcy, it’s important to understand the full story. You should know all of the advantages and disadvantages of declaring bankruptcy before you make your final decision.
You should expect to lose a lot when you declare bankruptcy. It’s a tough decision for anyone to make. Once you look through the full list of things you will have to forfeit when you declare bankruptcy, you will understand why it is so important to consider all of the advantages and disadvantages of declaring bankruptcy before you do it.
- It will affect your credit for as long as ten years. Anytime your credit is pulled, they will be able to see that you filed for bankruptcy. After that point, it will be erased.
- You will not be able to get a mortgage. It is technically possible, but realistically, you won’t be able to secure a mortgage until it is wiped from your record.
- You may lose property. It can be used to help reduce your outstanding debt.
- You will still be held responsible for child support and alimony payments.
- You will lose the use of your credit cards.
- You will still be held responsible for repaying your student loan debt
There are many more disadvantages to declaring bankruptcy. You also have to consider the social repercussions and embarrassment that can occur, and the long road you will have to go through before you can make a full recovery from it.
When it comes to the advantages and disadvantages of declaring bankruptcy, it’s never an easy choice. Bankruptcy was made to give people a way to “restart” when they find themselves in situations so bad that they are not able to recover from them.