Bankruptcy: Will It Benefit You?

For some people, bankruptcy is the best option, and it may even be the only one. However, other people have a lot to lose when they take this route, and it is not the best choice for them. You should consider whether this is the right option for you before you make this decision.

This financial move can be great when it comes to getting rid of debt. It can wipe out most of your old, unpaid bills, or at least let you create a payment plan so you can pay them back within three to five years. However, this move can also drop your credit score quite a bit. In addition, you will have this on your record for years, which means many lenders will not loan you money, at least not without a high interest rate. If you are planning to buy a house or car in the next few years, or need to get additional credit cards in the near future, you should rethink the decision to declare bankruptcy.

This option also has the benefit of stopping wage garnishments, bank account levies, and foreclosures in their tracks. This is great if you are worried about losing your income or house in the next few days or weeks. The minute you file, these actions have to stop, at least temporarily. However, temporary is the key word here. You have to come up with a plan to stave off these consequences permanently. If it turns out you cannot complete the bankruptcy, the wage garnishment, account levy, or foreclosure will be in place once again, so you have a lot to lose unless you come up with some quick money. This means that while going bankrupt can buy you some time, even if you do not complete the process, it does not solve everything.

In addition, there are some fees associated with bankruptcy, and you will likely have to pay at least some of them upfront. This means you have to get together some cash right away, unless you can find a lawyer who will take it all at the end of the case. This may require some research, so be prepared to put some time into the case if you do not have a lot of cash to pay an attorney.

You can always find out if bankruptcy is the right option for you by attending an initial consultation. This is free with most lawyers, and lets you get the basic information you need. Then you can make the right decision.