Pros and Cons of Filing for Bankruptcy
Posted on | September 10, 2010 | No Comments
A personal bankruptcy filing can help you get a fresh start, putting an end to the non-stop phone calls, letters and legal actions you face. There are consequences to filing for bankruptcy, though. Before submitting a Chapter 7 or Chapter 13 petition, you want to consider all the advantages and disadvantages, so that you make the decision that is best for you.
The Benefits of a Bankruptcy Filing
• For most people, the most important reason for filing for bankruptcy protection is to obtain the protection of the automatic stay. The automatic stay prohibits creditors from calling, writing or taking any other legal action outside the bankruptcy process to collect a debt. While the stay is in place, you can get caught up with some or many of your creditors.
• Filing for bankruptcy can actually help you get a quicker start on rebuilding your credit. Once creditors see that you have taken constructive action to resolve debt problems, they are often more willing to work with you and help you re-establish your credit.
• A Chapter 7 bankruptcy filing will allow you to permanently discharge some debts. This can free up the resources necessary so that you can meet your other financial obligations.
• Certain essential property is exempt from sale in a Chapter 7 petition, so you can discharge debts without losing your home, principal vehicle and other necessary items.
• Bankruptcy will stop garnishment, foreclosure and repossession proceedings.
The Consequences of Filing for Bankruptcy Protection
• You will lose all credit cards, unless they are paid off before you file, and you won’t have many opportunities for credit or credit cards for a while. In many instances, you can apply for new credit cards within 24 months, but may have to pay significantly higher interest rates.
• You may not be able to get a home mortgage for up to five years.
• You won’t be able to discharge all debts. Student loan payments, child support arrearages and certain tax debts cannot be wiped out in bankruptcy.
• Bankruptcy can carry an emotional stigma, but so can being sued for non-payment.
• A bankruptcy will appear on your credit report for up to 10 years, making it hard to buy a car or house, get life insurance or even a job.
• Bankruptcy is a matter of public record. If you file, your name will appear in court documents and may appear in the local newspaper.
Take a Close Look before You File
Bankruptcy is not for everyone. If most of your debt is in student loans or tax arrearages, you may be limited to debt reorganization or need to look at alternatives to bankruptcy. For additional information, contact an experienced bankruptcy attorney.
Helping You Regain Hope for a Better Financial Future
For consumers, typical causes of insolvency include a medical emergency, job loss or increase in payment on an adjustable rate mortgage. A business may get caught in an uncontrollable spiral of debt as a result of factors such as costly litigation, loss of major contracts, financial fraud or mismanagement, or the inability to secure new capital.
Debt Relief through Bankruptcy
Filing for bankruptcy may be an option for individuals and commercial enterprises in the grip of unmanageable debt. The U.S. Bankruptcy Code is designed to provide a legal avenue to help insolvent individuals and businesses pay off debt and regain financial stability.
At the Law Office of Areya Holder, P.C. in Irving, Texas, our exclusive focus is providing legal advice about bankruptcy and guiding clients through the bankruptcy process. Our firm represents individuals, small businesses and small to medium corporations throughout the Dallas / Fort Worth Metroplex, including Arlington, Plano, Bedford, Hurst, Euless and Grand Prairie, TX . The legal services we offer include a review and thorough evaluation of your finances in order to recommend the most effective legal approach to resolve your debt situation.
As a debt relief agency under the U.S. Bankruptcy Code, our law firm has extensive experience helping clients file for the following types of bankruptcy:
When you or your business are in serious financial distress, retaining an experienced bankruptcy attorney is an important first step in weighing available legal options and finding the best solution to regain control of your finances. Our firm does everything we possibly can to simplify the process of resolving debt issues.
Tags: Bankruptcy > bankruptcy attorney > bankruptcy code > debt relief agency > filing for bankruptcy > personal bankruptcy filing
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