If you are thinking of using bankruptcy as a way to find relief from your debt, you may want to take some time weighing the pros and cons before you file. If you are not sure how to analyze the pros and cons of this decision, talk to a bankruptcy attorney. He or she will discuss the following things with you, and this discussion should help you fully understand the pros and cons of filing for bankruptcy.
The pros
Using bankruptcy is one of the best methods for eliminating debt, especially if you qualify for Chapter 7. In Chapter 7, you can receive debt forgiveness, which means the court wipes out debts you owe leaving you with zero balances. Bankruptcy also offers a way to stop a foreclosure from occurring but doing so will require filing for Chapter 13. Chapter 13 is beneficial when you have good income but need help getting caught up on bills, as it offers a repayment plan for you that will last up to 5 years.
When you complete either branch of bankruptcy, you will owe less money, and this should help you out tremendously.
The cons
In addition to experiencing some good things from bankruptcy, there are also several consequences you should know about before you file. Here are some of the main ones:
- It may not relieve certain debts – Bankruptcy does not eliminate all types of debts, which means you could still owe money after you file. Choosing the right branch of bankruptcy will help you with this problem, and this is why you should talk to a lawyer before making up your mind.
- It will affect your credit – The other main consequence of filing for bankruptcy is the effects it will have on your credit. The filing of your bankruptcy will appear on your credit report for as long as 10 years. While this will not stop you from getting credit lines during this time, it may make it more difficult for you to get loans for at least a few years.
You should always know fully how bankruptcy will affect you before you file because it is not always the best option for everyone.
Filing for bankruptcy can offer a lot of relief to people who have a lot of debt, but there are also consequences involved with filing. To find out how bankruptcy would affect your financial future, talk to a bankruptcy law office like Martinez Law Firm today.
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