When Debt Relief Is not Good Enough: Bankruptcy Intro
Most people can seek debt relief by turning to a budget counselor and credit negotiator. This helps them reduce the amount of money they owe. However, in some cases it may be too late or for whatever reason this action does not solve the problem.
In this case, often people decide to file for bankruptcy. However the pros and cons of doing so need to be weight very carefully. This is not a matter that should be taken lightly.
Advantages
You want to achieve greater financial freedom. This is one way to do it, as it can free you from feeling so hopeless because you cannot pay your debts. It helps you get a fresh start, too.
It also helps distribute any assets you have to pay your debts evenly. No one creditor will get everything.
Furthermore, just about anyone can go bankrupt as long as the bills they owe warrant such an action. That means you can even if another partner in a business does not want to, and you can as an individual.
Disadvantages
You could lose your assets. For instance, if you have a car say goodbye to it maybe, and this goes for all your material things in your home. If your situation is bad enough you could even lose your home.
The other disadvantage is that a creditor may in some cases (depending upon the laws in your location) file bankruptcy for you. This is an involuntary action which you cannot do anything about. It does not seem to happen that often to people but it can happen.
It also requires legal fees, and it requires you to spend some time in court. This is not a very pleasant process sometimes unless you have a very good lawyer.
Another major disadvantage is that the record of your bankruptcy finalization remains on your records for up to 10 years. In most cases it lasts 7 years. This can make it tough for you to get deals on loans for homes and cars for quite awhile.
Conclusion
If you file for bankruptcy you may not even be able to get postpaid cell phone service for awhile. It affects every area of your life. Therefore, whenever possible get some help as soon as possible.