You should know that filing for bankruptcy is your right, especially if you have no means of making the payment or if it will take your more than 4 years to eliminate your debt. Some people will decide to declare bankruptcy to get away from harassing calls of collection agencies and to avoid lawsuits. While others may already receive a petition for bankruptcy, in this case the debtor is the one which files this petition against the debtor even if it is against his personal choice.
The most attractive part of bankruptcy is when you are declared debt free and you can start with a clean slate. However, this option should always be the last in your list because even though there are advantages to filing a bankruptcy, there are also disadvantages and it needs careful consideration before making your final decision.
As mentioned above the main advantage of bankruptcy is that you are no longer liable for the debt you have incurred no matter how much the sum is. You will no longer worry about how or when you can pay it. With this you can begin a new financial life and hopefully this time you can manage your finances better.
One of the biggest problems that debtors have is when the collection agencies try to call and make all possible to ways to collect money from you. They may even try to harass you just to get the amount from you. This can be very annoying and frightening to some. However, if you file for bankruptcy the court will order the collection agencies to stop those phone calls and stop sending those collection letters.
There may even be instances when some of your unsecured debts are discharged. When bankruptcy is discharged there is a big possibility that it will not show in your credit report, thus you will have a good chance of recovering faster from your financial troubles.
Because of those mentioned advantages many may feel that it is the best option, but they should fully understand the disadvantages of declaring bankruptcy so they can better decide.
When you declare bankruptcy all your properties will be taken away from you. They will be sold and the funds will be used to pay your existing debts. But not only this, you will also have a problem acquiring properties later on which may include any inheritance.
Bankruptcy will ruin your credit report and possibility of getting financial assistance such as loans is almost impossible. The worst thing is it might take about 10 years to fully clear your name from bankruptcy. If you have plans to paying your remaining debts to at least repair your credit score a little, you won’t be able to so because your petition for bankruptcy won’t allow you until after 6 years. This would result to the worsening of your credit score.
Declaring bankruptcy does not only affect your financial status, but your overall well being and your interpersonal relationships as well. So prior to thinking about this option try to seek advice from the experts so you will be confident that you can make the right decision.