Fast Facts: Bankruptcy Filing – The Pros and Cons

I believe in complete transparency and want my clients to have control over their financial picture, and to me this includes having realistic expectations when it comes to filing for bankruptcy.

While filing for bankruptcy protection will absolutely provide you with immediate relief, you should consider these pros and cons before you make the decision to file.

Keep in mind that consulting with an attorney and weighing all of your options is always your best course of action, but here is a list of things to consider (and ask questions about) in your consultation.

The Pros:
You are granted an automatic stay that immediately stops all creditor collection efforts.
Relief from dealing with multiple creditors.
Prevention of further legal action.
Ability to protect and keep assets.
Back taxes can be addressed.
Prevention of foreclosure and/or car repossession.
Debts will be settled for less than what you owe, or, in most cases completely eliminated.
The potential for your credit score to increase.
You can take on new credit while you are repaying existing debts.
A fresh start.

The Cons:
Federal student loans are non-dischargeable in most bankruptcies.
You may still be responsible for some debts.
If you have joint accounts, the other party may still be responsible.
It can stay on your credit report for up to ten years.
It doesn’t address the initial cause of your financial trouble, such as illness, loss of income, etc.

As always, I’m happy to discuss your unique situation with you for FREE, and am available to speak with you via text, email, phone or in one of my office locations.