Filing bankruptcy is a double-edged sword. While it can be
beneficial to you, it can also cause a lot of problems. This is why it’s important
that you understand bankruptcy and to study all your options before deciding
whether to file it or not.
Bankruptcy in a
Nutshell
Bankruptcy is filed when an individual or a business no
longer has the capacity to settle all their debts. Once it is filed, federal
laws give the individual or business “relief” from them. This means that you
will have a chance to turn your life around without debt collectors constantly
breathing down your neck. Declaring bankruptcy, on the other hand, wouldn’t
stop these collectors from collecting their debt. At the end of the day,
deciding whether you are indeed in financial trouble is still up to the courts.
Pros and Cons
The good thing about filing bankruptcy is that creditors
will be ordered an “automatic stay,” meaning that they are required to stop
trying to make you pay your debt. With this, you can take a rest from all the
calls, collection letters, and lawsuits. If this has been keeping you up at
night, then you can now breathe a little easier.
However, the reputation of being bankrupt will stay for
quite a while. It will be in your record for years, and will, consequently,
make you have a slim chance of getting approved for future loan or credit card
application. Before deciding, make sure that you consider all factors. Call a
collection attorney to help determine whether filing bankruptcy is the best
move for you.
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