Everything You Need To Know About Bankruptcy

March 9th, 2010 | Posted in Uncategorized

Bankruptcy may be seen as a quick fix solution to financial issues. However, the effects of bankruptcy are long term and can impair your ability to obtain employment, house, and any type of credit. It is important to weigh the pros and the cons of bankruptcy before making a major choice.

Admittedly, bankruptcy comes with a number of benefits. First and foremost it annihilates most of your debt. It can aid you with missed debt payments, defaults, repossessions and lawsuits. If you have horrible credit, it can get you started on rehabilitation.

Bankruptcy will hinder the phone calls from creditors, collections letters, repossessions, declined charge authorizations, cancelled credit cards, and lawsuits. You can also keep your car if you keep up on the payment; bankruptcy will also allow you to keep your home if you remain current on the payments.

Bankruptcy allows you to stop foreclosure and permits you to make monthly payments on amounts you have owed in the past. Finally, it stops creditors from making a claim after it is filed, even if your financial situation changes.

Conversely, bankruptcy law can offer a “fresh start” but only every six years in most cases. Bankruptcy will stay on your credit report for ten years and hurts your credit rating severly. Additionally, filing bankruptcy may require a wait of two years before it is possible to buy a home. Some lenders allow for home loans after one year however.

Bankruptcy does not annihilate most tax debt. It doesn’t whipe out student loan debt. You will need to give up your credit cards. It might cause you to lose some of your things, and unfortunately bankruptcy carries a stigma that can be embarrassing.

If you are not sure if you should to file for bankruptcy or not, call your creditors to figure out if there is a repayment plan they can work out with you. Even though bankruptcy is always an option, in most cases it should be seen as a last resort.

Mallory McGuinness is employed by a collections agency that works with a debt collection lawyer. She also writes stories on business and finance, the credit industry and collections agencies. You can get a unique content version of this article from the Uber Article Directory.