When considering filing for bankruptcy, it is important to evaluate the upsides as well as the downsides. In this article, we will take a look at some of the most significant pros and cons of filing for bankruptcy.
1. The most recognizable pro for filing bankruptcy is its capability to take debts off your plate and you are no longer responsible for them. When you have not been able to pay your bills, filing for bankruptcy might allow your debts to be waived legally. If not, there is also the opportunity to file for Chapter 13, an action that may allow you to combine your debts into only one monthly payment, a less expensive and more convenient option.
2. Furthermore, the court issues an automatic stay after you have filed for bankruptcy. This means any person or agency to whom you are in debt is prohibited from making any attempts to recover that money from you, including demanding phone calls or messages.
3. Surprisingly, filing does not mean you lose the entirety of your property. Through filing for Chapter 7, legal bankruptcy exemptions prohibit bankruptcy trustees from taking your possessions. Therefore, you might be allowed to retain such property as your house, personal belongings, your clothing, your jewelry, and other smaller assets.
4. Lastly, bankruptcy laws provide that you cannot be fired by your employer for filing for bankruptcy. More specifically, intolerance against filing for bankruptcy is prohibited under the law, meaning that you may not be fired for filing.
1. One major con is that filing for bankruptcy will not abolish all of your debts. Here are some of the debts that will persist after filing: Recent back taxes, the majority of student loans, child support, alimony, and unpaid government fines.
2. Moreover, filing for Chapter 7 allows you to save your exempt property but you will lose non-exempt items, which could include your house, case, cars, stocks, and bonds, depending on your economic situation.
3. Furthermore, filing leaves a mark on your credit record for ten years. This can potentially make it a lot harder to obtain a future loan if needed. Overall, by filing for bankruptcy, you increase the chance of having a substantially higher interest rate on the loans or credit cards.
4. In conclusion, bankruptcy costs money. The cost of filing includes fees for filing, bankruptcy trustees, credit counseling and an attorney.
To find out whether bankruptcy might be right for you, contact us at 816-471-5111 for a no cost no obligation consultation.