This year has been challenging for everyone. Some people have struggled more financially than others. If you’re uncertain about what your financial future will look like, read about the advantages and disadvantages of filing for bankruptcy. The findings may surprise you and sway your decision.
Advantages
There are many advantages the filing for bankruptcy. This might be surprising because a lot of individuals have a bad connotation of the term. Yet, filing for bankruptcy can get you out of a desperate situation when you need it the most. If you file for bankruptcy, you will:
- No longer hear from pesky creditors trying to get a hold of you.
- You may be exempt from debts if you can prove you’re unable to pay them back
- No more wage garnishments so you can keep all of your earnings.
Disadvantages
You should know about the cons of filing for bankruptcy before you decide. For starters, your credit score will likely decrease. It may take a while for you to build it back up again, meaning it’ll be harder for you to get a loan in the future. Also, your most beloved possessions and properties may be repossessed by the bank. Interesting Fact: you can keep your timeshare when you declare bankruptcy because they’re worthless in the eyes of banks and real estate agents.
Furthermore, you likely will not be able to collect a tax refund after you file for bankruptcy. So, it’s important to keep this in mind during tax season. Another thing that should be brought to your attention is that those who file for bankruptcy often experience emotional troubles. Housing developments and potential employers look down on those who file for bankruptcy. These problems can have an emotional toll on someone’s psyche.
This piece has discussed the advantages and disadvantages of filing for bankruptcy. If you’re tired of being harassed by creditors, then bankruptcy may be the right option for you. However, you should also keep in mind that some of your property and possessions may be repossessed after filing. Whatever you decide, make sure that your support system is aware so that they can be the sympathetic ear you need during this challenging time.
