Pros and Cons of Bankruptcy, During the Recession!

Saturday, April 11th, 2009 at 6:25 am

To File or not To File (Bankruptcy) that is the question!

In these troubling economic times people are losing money in record amounts. Many people have lost thousands of dollars in equity in their home.

Many people have lost their jobs, and used credit cards as a way to pay the bills, racking up huge debt that they may never be able to see the end of.

Others have become ill, or have had family fall ill. Combined with losing job from being unable to work while sick, many are facing huge medical bills and no or little insurance to pay for it all.

When there seems to be no way out, is when bankruptcy may become an option.

Before filing for chapter 7 or chapter 13 bankruptcy it is mandatory that you go through credit counseling.

Bankruptcy can be a devastating proposition for many people, but bankruptcy can also be the light at the end of a very steep tunnel. Bankruptcy can be the beginning of fiscal responsibility.

Pro’s of Bankruptcy:

Bankruptcy wipes away all debts, allowing a low repayment over the course of five years.
Crediters often reduce the debt owed, thus lowering the total amount you must pay.
Following bankruptcy, you will have a fresh start, and can begin to build a more positive credit history.
Depending on the way that you file bankruptcy, you may retain most of your possessions, and assets.

Con’s of Bankruptcy:

After bankruptcy you will need to wait two or more years before applying for a new line of credit.
You have to pay all legal fees in advance to a lawyer representing you during the proceedings.
There is always a chance of losing some of your assets, depending on if you file for chapter 7 bankruptcy, or chapter 13 bankruptcy.
Your credit report will remain negative, until you start to build good credit again.
If you get stuck in the debt trap again, you will be unable to file a subsequent bankruptcy for 7 years.

These are just a few of the pro’s and con’s of filing for chapter 13 or chapter 7 bankruptcy. Now you should have a decent understanding of what to expect before, during, and after filing for bankruptcy.

If you have other alternatives, I highly recommend pursuing them. Bankruptcy should be a last ditch effort, when all other measures have been exhausted.

If you are at the stage though, where no other option exists, I highly recommend you get a Free Bankruptcy Consultation. Affordable Bankruptcy is a great company that offers a free bankruptcy consultation with a Lawyer in your area.

If you’re not quite ready for bankruptcy, then Debt Match can help you lower your payments on credit cards by as much as 60%, it’s a great option if you think you can still pay off your debts. Click here now to eliminate your debt in as little as 12 months!