The pros and cons of bankruptcy

On Behalf of | May 18, 2018 | Bankruptcy |

Are you worried what your extended family or close friends will think if you file for bankruptcy? Many South Carolina residents agree that the negative stigma attached to filing for debt relief causes some people to avoid their most viable options for regaining financial stability down the line. If you’re able to set your worries aside, you may find that support is available, and often only a phone call away.

As with most major life-changing decisions, there may be benefits and downsides to choosing bankruptcy to help you overcome a financial crisis. Once you know more about the potential pros and cons, you can weigh the balance and determine if seeking this form of debt relief is in your best interest. It also helps to talk to others who have successfully navigated the bankruptcy process in the past.

Possible upsides

It might be easier to explain bankruptcy to a future lender than to have to share information about defaulted loans, major credit card debt and other bad financial memories.  Bankruptcy can prevent aggressive creditor action against you.  Filing for immediate debt relief through bankruptcy essentially gives you a whole new financial lease on life.  You may be able to retain ownership of your largest assets, such as your home or car because such assets are often exempt from bankruptcy.

The not-so-upsides

While you may be able to keep some of your assets, you may lose others.  To request bankruptcy, you have to explain your financial crisis to the court.  Certain debts are non-dischargable, such as tax debt or child support. Bankruptcy remains on your credit report for a handful of years.  The bottom line is that you may be able to bounce back following serious financial problems if you gain the right information and tap into available assistance to help you set the tone for a financially strong future.

Factors to consider

Before determining which type of bankruptcy best fits your needs and financial goals, you may want to think about various factors, such as what types of issues led to your crisis. Was it medical bills, loss of employment or sudden income change? Maybe you just got into the habit of spending more than you make. It’s also wise to remember that bankruptcy will impact your credit score.

Who can help?

You may have a close family member or colleague who has gone through similar circumstances. He or she may have sage advice regarding ways about getting your finances back on track. When someone shares what worked in his or her situation, it may spark an idea as to how you can rectify your own. Many South Carolina residents seek outside support by discussing their financial problems with experienced debt relief attorneys.

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