Pros and Cons of Filing For Bankruptcy

Sometimes it is impossible to prevent personal disaster from occurring. You lose your job, your car breaks down at a most inopportune time, or perhaps somebody in your family comes down with a serious illness. There are bills to pay, and the debts accumulate faster than money earned to pay them off. It may come to a point where you may consider filing for personal bankruptcy in order to find financial assistance, but is that the right step for you to take? You can consult with a bankruptcy lawyer if you are uncertain, but you should know that there are pros and cons involved in filing for bankruptcy.

Pros of Filing for Bankruptcy

For those who have no savings and a poor budget, bankruptcy may appear to be the last resort option. One should not consider it recognition of failure, however, as different circumstances lead people to file every year.

When one files for bankruptcy, all creditors are unable to continue their collection attempts until your case is resolved. Many people who file find this is one of the more welcome benefits in that the phones calls and notices dramatically decrease. Filing for bankruptcy allows you the time to sort out your financial situation so you can take the next steps without further anxiety.

Another benefit to bankruptcy is that, with the help of a good attorney, you do not necessarily have to give up certain assets. Loss mitigation procedures can help keep you in your home, and you have the opportunity to start over financially.

Cons of Filing for Bankruptcy

One item of concern that leaves people reluctant to file is the fact that once you do so, the notice stays on your credit report for about ten years. This mark on your personal financial record becomes an irritating stain that may brand you as a risk in the eyes of others.

You may find, even long after your case is resolved, that it is a challenge to buy a car or new home, or to get financing on furniture and other items. This doesn’t mean, however, you will be turned away every time you apply for credit, but you may be subject to restrictions and higher rates as a result of your financial history.

Whether or not bankruptcy is the right option for you is a serious decision to make. Seeking the counsel of a lawyer who specializes in personal finance is a good step in determining your future.

Kathryn Lively is a freelance writer specializing in articles on Norfolk bankruptcy lawyers and Virginia bankruptcy lawyers.

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