When you are backed against a wall by debts, the answer can seem obscure and out of the way. In the panic that is caused by debt, the answer of bankruptcy can often feel like a tempting one. The thing about bankruptcy is that many people don’t know all the facts. They don’t know the pros and cons of both and how to manage in the aftermath of declaring bankruptcy.
Being in debt is not an easy thing to deal with. Apart from the strain on your finances, you’re dealing with the emotional battle that comes with owing money to companies and others around you. It’s a struggle for some just to make ends meet for the mortgage without being saddled with crippling debt repayments on top. Once you fall behind with one payment, debts can often snowball and even if you use websites like creditrepair.co to help your credit later on, you can often find recovery from bankruptcy difficult. So, the question that you have to ask yourself is whether bankruptcy is the answer to your woes. You have to ask yourself whether it’s beneficial for you to file for bankruptcy in the first place, as while it can help you discharge some of your debt it doesn’t get rid of them all.
You can stall the foreclosure of your house and keep your car while you catch up on payments that may have been missed out, which can be a blessing when you’ve waited to catch up on yourself for a while. The thing is, bankruptcy doesn’t change the unsecured debts you owe, which includes the mortgage and the loan you have on your car. You also will not be discharged from alimony or child support debts, or even student loans. If your debt that you hope to write off is lesser than those secured, is it truly an answer to the problem? Refinancing student loans can be a good starting point, since this debt cannot be expunged whether or not you elect to pursue bankruptcy.
Bankruptcy stays on your credit file for up to a decade before it drops off, which means that if you happen to need a loan in the meantime you won’t be able to get one. Filing for bankruptcy can also impact future employment opportunities if your employer runs a credit check on you. Filing means going ahead and meeting with counselling agencies and the bank to make sure you have your options covered. It means that you have to lay your debts out on the table and talk to people about who and what you owe and how much you are in the hole. It’s not the right answer for everyone out there, and it certainly isn’t going to let go of all your problems, but filing for bankruptcy could change things for you. It could make it easier to keep your home if you don’t want to lose it.
Bankruptcy may not be a cure for you, but it may be an option that you explore fully before you go ahead. Be smart about your options and consider all consequences so you know that you are in the right place for your finances. Should you declare? That’s up to you, your family and your financial and/or tax advisers. As long as you are clear about the result of doing so, you can be secure in your decision.