When in debt, bankruptcy is oftentimes the best solution to becoming debt–free
Bankruptcy can stop creditors from hounding and harassing you, especially if they are starting to step over the boundaries of decent behavior. Bankruptcy will end wage garnishment, helping you to purchase necessities and get out of debt. CreditNowUSA will connect you with bankruptcy experts and help you get a new start.
Reasons to file for Bankruptcy
- If your home is in risk of foreclosure then filing for bankruptcy can prevent this from happening, as well as put a reasonable and affordable repayment plan in place enabling you to get caught up.
- If your car or other property has been repossessed, bankruptcy can have these returned to you, especially if the lack of these items hinders you from getting caught up.
- You may have huge medical bills, either on their own or combined with a loss of employment, which can often create a nearly impossible situation to overcome. Bankruptcy can help you out of this and possibly reduce or wipe away your medical bills.
- Bankruptcy can prevent your utilities from being shut off, or if necessary, get them turned back on.
Student loans will not be eliminated, but they can be consolidates, allowing you to pay them off in a reasonable manner.
Bankruptcy and your credit
The fact that you filed for bankruptcy will be a red flag on your credit report. However, that fact in itself does not need to haunt you, since there are circumstances where bankruptcy is indeed the best decision to make. There are many successful people who have been through bankruptcy and today are back on their feet, having learned huge lessons from what got them into financial trouble and how to keep it from recurring.
The advantages of filing for bankruptcy
Filing bankruptcy will grant you immediate but only temporary relief. Annoying phone calls, repossessions, and mortgage foreclosures are all stopped temporarily. The main goal of bankruptcy is the discharge of most, if not all of your debts. The discharge wipes out many types of unsecured debt like credit card and medical debts. You are legally debt free once you get the discharge, enabling a fresh financial start.
The negative effects of filing for bankruptcy
The largest disadvantage of bankruptcy is the immediate impact on your credit score . You cannot remove bankruptcy from your credit report for 7–10 years. There will be a few years while you improve your credit score that you will have to work with subprime lenders. This means higher interest rates on your future loans or credit cards.
Since bankruptcy is a federal court case, you need to give detailed financial records to the court as well as the creditors; therefore financial affairs will become open to the public. And you cannot use bankruptcy again for the next eight years after the discharge of your debts.
Bankruptcy could be the option for you
Although there is still a stigma attached to bankruptcy, sometimes can actually be the best option that you have available to you. Naturally, there are a few negative consequences to filing. One of the major consequences of filing for bankruptcy is that you will see a long term effect on your credit score . Typically bankruptcy will remain on your credit for 7 to 10 years. While you will be able to improve your credit, you should know that you will be working with lenders that will offer higher interest rates as well as more strict repayment terms. In short, you won’t have the same freedom as you did before you filed.
Something else to consider is that bankruptcy requires you to show not only your creditors and the company you work with your financial records but also the court. This means that your finances will be a matter of public record. While this is understood, it can hurt your reputation which can be a negative especially if you are well known in business circles. You will also not be able to use this is a way to get out of debt for the next eight years.
That being said, there are many benefits to pursuing this course of action. For one thing, you will get a reprieve from collector calls, foreclosure and repossession. Remember that bankruptcy will wipe out much of your unsecured debt and will essentially allow you to start from nothing again with a clean slate.
Filing for bankruptcy will and any form of wage garnishment and can also get your utilities turned back on or prevent them from being shut off in the first place. Something to consider is that student loans are not affected by this filing. What it does do however is allow you to make them into one payment thereby making it a little easier to get rid of them
As you can see, filing for bankruptcy has several benefits but there are also negative consequences as well. One thing you will need however is a company that knows how to navigate the pitfalls of bankruptcy and allow you to come out with your dignity intact.