Bankruptcy – Is It Good For You?

Filing for bankruptcy means that you can’t pay off your debts at all. There are two possible ways that will provide you relief. Either the bankruptcy court will remove all your obligations to repay those debts that you are unable to pay (chapter 7) or chapter 13 which involves a 3-5 year plan during which you being the debtor must repay the debt.

Bankruptcy leaves long last effects on your credit reports. It also leaves a negative impression on your ability to receive credit cards and get loans in future. Bankruptcy lasts for next 7 years as a black dot on your credit report. You must not file for bankruptcy unless you encountered with serious bad credit conditions. You can go for other options instead of bankruptcy if you have current accounts.

Substitutes for Bankruptcy

You can ask your creditor to give you amnesties and leniency on certain terms to repay the debt. You can negotiate the repayment terms with your creditor and discus your bad financial condition with him. After sharing your bad financial conditions with your creditor ask him to reduce the higher interest rates and payments. Contact all your creditors and try to convince them on your bad financial circumstances. Don’t be disappointed if they don’t agree on your terms and try to search for other creditor that is interested in working with you.

You can also negotiate with your lender and ask him to give some relief on payments for a certain time period. This step will shrink your monthly payments and you will be able to reach your financial obligations.

Search for consumer credit counseling if you fail to get relief on your payments from creditors. This counseling will help you to work with creditors. Credit counselor will guide you how to get relief from bad financial condition to meet financial obligations.

You can also sell out your valuable assets (if have any) to pay off the debts. Not only that but also you can sell certain valuable items to collect money for pay off. If you have saved some money in past then you can also use it to pay off your debts.

Benefits of Bankruptcy

Bankruptcy will save your money from garnishment. Bankruptcy will also save you from the questioning and judgment from the creditors. You can file bankruptcy to protect yourself from legal notice from creditors. You can also contact your attorney to take guidance about the benefits of bankruptcy.

Many people deliberately file bankruptcy to overcome their large medical bills. People who have medical insurance also prefer bankruptcy sometimes when insurance doesn’t work to reduce large medical bills.

Consult Legal counselor Before Filing Bankruptcy

You must consult to legal counsel to get the complete information about bankruptcy before filing for it. Consult with lonely licensed bankruptcy attorney to get reliable and right information. Consult with legal counsel to take guidance to deal with all debt related issues before filing for bankruptcy.