Pros & Cons of Filing for Bankruptcy
Things are viewed as Black or White these days. It’s either left or right, good or bad, hot or cold … and so on. But that’s not how it should be.
Bankruptcy. Some people hear this word and immediately think it is bad. Yes, there are some negative aspects of it, but largely, the positives outweigh the negatives.
PROS
- Your general unsecured debts are forgiven. For most individuals this will be credit cards, medical bills, evictions, repossessions, paydays loans and personal loans … and some taxes. This will not include child support, fines, fees, student loans, and debts resulting from fraud.
- Creditors will actually view you to be more credit worthy after filing for bankruptcy. This is for two important reasons: (1) you are now debt free, so they know at the end of the month you will have more discretionary income than you did prior, (2) they know you cannot file a Ch 7 bankruptcy again for 8 more years. Additionally, as long as you take positive financial steps, you can expect your credit score to be higher than it was 12-24 months after filing.
CONS
- You will need to gather documents for your attorney such as paystubs, tax returns, titles and bank statements
- Your credit will take a dip for a few months
- It will be on your credit report for a few years
At the end of the day you need to decide what is best for you and your family. Ignore the stigma that is associated with filing for bankruptcy, because let’s face it, it is not nearly as bad as people think it is. Besides, only the people you want to know about your bankruptcy will be aware you even filed. Even though it is a “public record” the average person has no way of viewing said record.