Did you already know that you can indeed file for bankruptcy? No, then it is a fact that you can file for bankruptcy for various reasons.
However, this blog has a list of advantages and disadvantages that you can look at, which will help you understand the concept better.
|Advantages Of Filing For Bankruptcy||Disadvantages Of Filing For Bankruptcy|
|Filing for bankruptcy grants you a stay||Filing for bankruptcy might cause a loss of the value of assets and can be expensive.|
|Filing for bankruptcy will ease you from dealing with multiple creditors||Filing for bankruptcy will allow the car insurance premium to go up|
|Filing for bankruptcy will allow you to get a court appointment representative||Filing for bankruptcy will ensure to see that you are responsible for some debts|
|Filing for bankruptcy can prevent further legal action||Filing for bankruptcy allows another joint account holder to get into trouble|
|Filing for bankruptcy will allow you to keep some assets||Filing for bankruptcy can allow one to face criminal charges|
|Filing for bankruptcy will address some back taxes||Filing for bankruptcy is a long procedure|
|Filing for bankruptcy will prevent home foreclosure||Filing for bankruptcy can result in loss of business|
|Filing for bankruptcy will endure to settle down the debts for less than you owe||Filing for bankruptcy can lead to eviction, and will encounter troubles in renting in future|
|Filing for bankruptcy will allow one to write off some debts||Filing for bankruptcy will allow you to receive high-interest rates|
|Filing for bankruptcy will increase your credit score||Filing for bankruptcy can have an impact on job|
|Filing for bankruptcy will allow you to take new credit cards||Filing for bankruptcy will allow the public to witness|
|Filing for bankruptcy will allow you to start fresh||Filing for bankruptcy will drop your credit score|
Advantages Of Filing For Bankruptcy
Grants a Stay:
You will instantly be granted a stay when you file for bankruptcy. You will be protected by all means under a provision in bankruptcy law which is called the automatic stay. In this case, no creditor can pursue the payment of your debts until you are controlled by bankruptcy law under a provision.
Eases the deal:
If you are stressed that your creditors are behind you for the payments, listen carefully. You will be completely safe and secure and can live with ease once you are done filing for bankruptcy as it helps deal with complete ease with the creditors.
Appointment of representative:
As you finish filing for bankruptcy, you will be appointed a personal trustee to take over your case and see to it the best way possible. He or she will regulate the procedure on your behalf until the end and handle all kinds of communication between you and your creditors if needed; the trustee is considered a mediator. And he or she will be the one to receive and process your payments.
One of the prime benefits of filing for bankruptcy is that the bankrupt can lawfully clear the responsibilities for the debt that you have he has made. Moreover, it will also prevent further legal consequences that are related to the non-payment of debts.
Retainment of assets:
Filing for bankruptcy will allow you to retain some of your assets as you repay your debts. However, a few valuable assets will be protected by federal or state exemption laws, which depend entirely on where you live. This is one of the nicest advantages that you can cherish with filing for bankruptcy.
If you have ever wondered about the best way to deal with back taxes, you must have already thought that it is through filing for bankruptcy. Yes, filing for bankruptcy will address some of the back taxes; specifically, those that are older tax taxes can be discharged. This is eligible if your tax debts are at least three years old.
Filing for bankruptcy will certainly prevent home foreclosure or repossession. You can retain your car if concealed under the laws of exceptions.
Settles down the debts for less:
If you think you can never pay off your debts, try considering filing for bankruptcy, as this will help you settle down your debts for less than you owe your creditors.
Because your creditors will be urged to accept whatever you will pay them at the end of the day, as this is committed in a bankruptcy case. All of your unsecured debts will be dismissed, which include card debt, medical debt, and Personal loan debt.
Write off some debts:
Once you finish the bankruptcy case, any released debt is gone for your best interest. Your creditors will never come back and can never try to obtain any debts that were ignored during bankruptcy.
Increases credit score:
Yes, it is a fact that filing for bankruptcy will increase your credit score, but under some applied conditions. However, if your credit score is not that great earlier, then there is a very low chance of your credit score enhancing. Moreover, the credit utilization ratio is one facet that discerns your future credit score.
New credit cards:
If you have lost the credit cards or thought not to use them any longer, then filing for bankruptcy will have your back.
Filing for bankruptcy will allow you to take new credit cards. However, your credit score will be less likely to be low.
Filing for bankruptcy will allow you to start fresh. This will certainly provide you with a much-required neat slate to restore your financial life. This will also help build healthy patterns around a monetary purpose. Well, this was the list of advantages that you can achieve by filing for bankruptcy.
Disadvantages Of Filing For Bankruptcy:
Loss of value:
Filing for bankruptcy might lead to a loss of the value of assets. However, it depends on what kind of assets and factors are involved. Moreover, your appointed trustee might require you to sell the items to repay your creditors.
Yes, filing for bankruptcy can cost you an arm and a leg. It can be really expensive for one to file for bankruptcy. The cost might range between $1000 and $1750, which everyone could hardly afford.
Responsible for some debts:
Filing for bankruptcy will necessarily ensure that you are responsible for some debts. And that includes a lot of exceptions; however, they are rare.
If you have trouble keeping up with the Federal student loan payments, you might have to look at income-based payment plans.
Yes, filing for bankruptcy allows another joint account holder to get into trouble. This is a crucial facet to comprehend before enhancing a co-applicant to a credit application, and you will have to be sure that your co-borrower discerns this too.
The data that you deliver while filing for bankruptcy will be examined thoroughly. If you are furnishing any false information, you must face lawful action. It is in your best interest to be completely honest about your assets and any income you receive.
Filing for bankruptcy is a pretty long procedure, as you must follow a three to five-year payment plan before your case is discharged.
Loss of business:
If you already have your own business with a trustee in your case, it will infer its value, and you will be forced to sell it in the future.
Sometimes, your trustee might regulate the firm until the sale is entirely made. Hence filing for bankruptcy can result in loss of business.
If you are willing to rent your house and you are behind in your payments, you might be urged to abandon the property if bankruptcy is discharged. Nonetheless, if you are still present on your rent payments, it can be unusual to be eliminated over a bankruptcy filing.
Filing for bankruptcy will enable you to encounter troubles in renting your possessions in the future. You might experience complications as the management of different companies might, by default, reject prospective tenants who owe in their credit history.
Impacts on the job:
Yes, you heard it right. Filing for bankruptcy can have a huge impact on the job. This might prevent you from holding several positions, although it is rare for this to take place.
This can also put you into trouble, especially for those who work with money. If you try to apply for a new job, the employer will address your bankruptcy file during the credit check, showing it as a public record.
As already discussed above the int, your bankruptcy file will be shown as it is held as a public record. This comprises when someone operates a background check on your employment or housing.
Filing for bankruptcy will drop your credit score, which clearly shows while filing for bankruptcy. If you had a good credit score before filing for bankruptcy, this might enable you to witness a pretty big drop in your credit score. However, if your credit has always been low, then this might not cause any trouble to you in the future.
Car insurance corporations use an industry-specific credit statement based on your credit file; if you require to protect auto insurance after filing for bankruptcy, rates will likely be influenced. Moreover, filing for bankruptcy will increase the car insurance premium.
Filing for bankruptcy is ultimate. Once you are done filing for bankruptcy, there is no looking back, as it will be finalized.
That is one of the reasons you ensure if you really need it and think twice before signing up for it. If you are in a dilemma, you can consider debt counseling, which helps you discern better.
Although you qualify for new credit after filing for bankruptcy, it will come at a premium which can be high at certain times. You are more likely to witness high-interest rates, unlike others. Moreover, you will be eligible to get a loan or credit for a very small amount.
Well, this is the list of disadvantages you can expect from fig bankruptcy.
All in all, these were both the advantages and disadvantages of filing for bankruptcy that you have to discern. If you are looking for it, it would be best to go to a counselor for the finest advice.
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