How You Can File Bankruptcy
Filing for bankruptcy is not easy, you will have to accept the fact that you are no longer capable of paying the debt you have incurred. Filing for bankruptcy is not the end, it can be the beginning of your revival. It is an option you can take if the threat of repossession and foreclosure are weighing you down.
Claiming Bankruptcy
Claiming bankruptcy is your right, but before you decide to do so there are things that you should consider. Once you claim bankruptcy, you are admitting that you are unable to pay for your debt and are currently insolvent. Claiming bankruptcy has its repercussions, your credit report and rating will take a huge blow when you file for bankruptcy. You will have a much harder time getting credit after you file for bankruptcy.
You would also have to provide income contributions or sell assets that you have equity in to satisfy the debt you owe your creditors.
Disadvantages of Filing for Bankruptcy
Filing for bankruptcy still has its disadvantages. Aside from affecting your credit score for the worst, filing for bankruptcy has other disadvantages. Once you file for bankruptcy, you will have to pay your secured creditors in some way. Two examples of secured debt are car loans and mortgages. With secured debt, you can force your creditors to accept payment over a longer period of time, but you cannot keep the collateral if you do not or cannot pay for the outstanding debt. You are unable to discharge debts that arose after you file for bankruptcy. Also, your co-signer cannot be discharged of the debt you incurred when you file for bankruptcy.
Advantages of Claiming Bankruptcy
Bankruptcy is not as bad as other people think. You may lose face and feel embarrassed about giving up on paying for debt, but filing for bankruptcy can save you from paying for debt that will hamper your future.
By filing for bankruptcy, you can free yourself from the obligation of paying for certain debts. You can prevent the foreclosure of your house and continue to pay for missed dues. Filing for bankruptcy prevents wage garnishments, debt collection harassment, or even repossession of property.
Filing for bankruptcy has its advantages, you need to inform yourself and consult with a lawyer to help you with the process and take the best step moving forward. By asking help from a debt consultant, you will know and understand your financial situation. With the help of a consultant, you will know if filing for bankruptcy is your best option.
About the Author
A debt consultant like Irving A. Burton can help you better understand the advantages and disadvantages of filing for bankruptcy and claiming bankruptcy.
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