Financial hard times can fall on anyone at any time. One day your finances are in order and all your bills are paid, and the next you’re buried in debt. Contrary to popular belief, bankruptcy isn’t just a threat to the financially irresponsible. Unforeseen medical problems, divorce, and other circumstances can cause even the financially secure to consider bankruptcy. Many people will have to face the decision of deciding whether or not to file for bankruptcy. When it comes to filing for bankruptcy, most do it too early or too late. Here are some things to consider when deciding whether to file for bankruptcy.
Consider the alternatives
Many who face financial hard times jump straight to the conclusion of bankruptcy without giving a thought to the alternatives. Many in this group don’t fully understand what bankruptcy is and how it works. For instance, bankruptcy doesn’t erase every debt. Some debts such as school loans, alimony, child support and taxes can’t be discharged through bankruptcy. If a person weighed down by student loan debt were to file bankruptcy, it wouldn’t accomplish anything.
There’s another major reason you shouldn’t rush into bankruptcy. It comes with some serious and long term consequences. A bankruptcy remains on your credit report for ten years. During that time you’ll have a harder time getting lenders to let you borrow money. You can expect lower credit limits and higher interest rates. Another consideration is that once debts are discharged through a Chapter 7 bankruptcy, you cannot file for Chapter 7 again until eight more years.
Finally, there are several alternatives that may be better than bankruptcy depending on your situation. Your creditors may be willing to work with you by lowering your monthly payments and extending the repayment period. Another option is a debt consolidation loan from the bank.
Don’t put it off
You may be wondering, if bankruptcy has so many consequences and there are so many alternatives, why file for bankruptcy? The answer is, “because sometimes it is the best choice.” The important thing is that you arrive at it only after exploring all other options. Nothing is gained from putting off bankruptcy when all other options are exhausted. Many who wait thinking someday they’ll win the lottery and repay all their debts only worsen their financial situation. The bottom line is, don’t file for bankruptcy prematurely, but don’t put it off either. A bankruptcy attorney can help you determine when bankruptcy is the right choice for your situation.
Business, real estate, and bankruptcy law and litigation news brought to you by mbblegal.net
Source: newsfix.ca/2013/12/03/financial-advice-considering-the-alternatives-to-bankruptcy/
Consider the alternatives
Many who face financial hard times jump straight to the conclusion of bankruptcy without giving a thought to the alternatives. Many in this group don’t fully understand what bankruptcy is and how it works. For instance, bankruptcy doesn’t erase every debt. Some debts such as school loans, alimony, child support and taxes can’t be discharged through bankruptcy. If a person weighed down by student loan debt were to file bankruptcy, it wouldn’t accomplish anything.
There’s another major reason you shouldn’t rush into bankruptcy. It comes with some serious and long term consequences. A bankruptcy remains on your credit report for ten years. During that time you’ll have a harder time getting lenders to let you borrow money. You can expect lower credit limits and higher interest rates. Another consideration is that once debts are discharged through a Chapter 7 bankruptcy, you cannot file for Chapter 7 again until eight more years.
Finally, there are several alternatives that may be better than bankruptcy depending on your situation. Your creditors may be willing to work with you by lowering your monthly payments and extending the repayment period. Another option is a debt consolidation loan from the bank.
Don’t put it off
You may be wondering, if bankruptcy has so many consequences and there are so many alternatives, why file for bankruptcy? The answer is, “because sometimes it is the best choice.” The important thing is that you arrive at it only after exploring all other options. Nothing is gained from putting off bankruptcy when all other options are exhausted. Many who wait thinking someday they’ll win the lottery and repay all their debts only worsen their financial situation. The bottom line is, don’t file for bankruptcy prematurely, but don’t put it off either. A bankruptcy attorney can help you determine when bankruptcy is the right choice for your situation.
Business, real estate, and bankruptcy law and litigation news brought to you by mbblegal.net
Source: newsfix.ca/2013/12/03/financial-advice-considering-the-alternatives-to-bankruptcy/
