What Are the Pros and Cons of Declaring Bankruptcy?
Author: Jeremy Edwards
Contrary to popular belief, despite changes made in 2005, bankruptcy is still a possibility for the vast majority of people for whom is was prior to the congressional changes of that year. But as with any financial decision, it is one that should be carefully thought out. And you cannot possibly make a decision before educating yourself on the pros and cons of declaring bankruptcy.
And when it comes to the pros and cons of declaring bankruptcy, the obvious place to start is with the major benefit and reason that people opt for it in the first place. The possibility of having your debts completely wiped out, being gifted a fresh financial start and the opportunity to essentially start again in financial terms. This can be such a huge relief to those who have been dogged with unmanageable bills for months and months and who have been terribly frightened for their future. However, bankruptcy will not eradicate all bills. While it will deal with credit card bills and medical bills, as well as other unsecured finance, it will not wipe out, generally speaking, student loans, criminal fines, alimony or child support.
One of the biggest downsides is the damage it does to your credit of course, what with bankruptcy featuring on your credit file for ten years. While this will make it difficult to get credit, and will ensure that you are getting much higher interest rates when you do manage to get credit, this again could also be an opportunity. With no other debts to pay off you can make regular repayments on a small and manageable credit line, thus rebuilding your credit for the longer term.
The other disadvantage is the stigma attached to such a move and its associated shame.
So there is a lot to weight up and you should make sure you consider all the pros and cons of of declaring bankruptcy before you go ahead.
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Find out more about declaring yourself bankrupt and what are the considerations you should take note of.
I am in the process of declaring bankruptcy. I don’t know if I should keep my car (1999) or let it go. HELP!
I owe more on the car than it is worth.
Brothers fiance declaring bankruptcy?
My brother is getting married next week to a woman in teh process of declaring bankruptcy. In theory it’ll be done with before they get married.
If it IS done with, what repurcussions can this throw back on him;
If it’s not done with, how can this affect him and his credit?
How soon after declaring bankruptcy can you buy property?
I am in the process of filing for chapter 7 bankruptcy. My girlfriend and I are also trying to buy a house. She has all of the money for the house. We are going to pay cash. All of the debt that I am declaring bankruptcy on is mine. I haven’t used a credit card in nearly a year, but am still buried in debt.
How soon after declaring bankruptcy can I own property? We would like to put my name on the house at some point, but don’t want it to look like we have been hiding assets.
Should I rent a house if the owner is declaring bankruptcy?
We are looking to rent a house from a lady. The down side is she told us that she is in the process of declaring bankruptcy. She said that her lawyer told her that she could try to rent the house out for a year and buy it back. Is there a risk into moving in there or am I safe? Thank you
Would declaring bankruptcy cause me any issues in my application process to medical school?
I am close to declaring chapter 7 and I was hoping to apply to medical schools within the next four months. Will a bankruptcy disrupt my application at all? Thanks.
Check the sites thoroughly. It’s an excellent site with some wonderful options for you. It will definitely help you. Have a look.
http://bankruptcy-info.we.bs/
http://www.loan-house.info/2009/09/choosing-right-bankruptcy-attorney.html
If you need the house only for a short time, go ahead with only a month-to-month lease. If she sells the house or the bank forecloses on it, the new owner will have the right to make you move out regardless of any written lease you have with the first owner.
If she is able to sell the house outside of a bankruptcy filing, then things would be different.
I hope this helps.
Gary
It is not uncommon to owe more on a car than its worth. If you get another car, your interest rate is going to be very high. Thats not going to help you. Further more you will be upside down in that loan as well the moment you drive it off the lot.
Which car, (the one you have now and the one you think you may have later on) is going to paid off first? Go with that one.
If there is any possibility that you can avoid the bankrupsy do it. Other wise your in trouble for a long time to come. It will cost you. You may not see it now, but you will pay before all is said and done. For the next 10 years anything you need to borrow for, is going to hit you hard. So in the end your actual out of pocket dollars is going to be killer if you have a bankrupsy on your record.
I’d be less worried about how this woman’s current bankruptcy proceedings pan out than how her future mismanagement of cash could ruin your brother. She shows an obvious history of not being able to manage her cash and live within her means. I’ll wager she’ll do the same with the new found line of credit she’ll have with your brother. Money is the main problem with most marriages and often leads to divorce. I wouldn’t doubt the same will happen here based on her past experience. Unfortunately your brother may be stuck paying the price. I wish him well.
You will have to wait until it is discharged. The time for this varies on a case by case basis.