In truth, it’s impossible to be 100% at the top of your finances.
Even as a business that has a special financial advisor, there are times when things turn bad and you start running out of funds which leads you to obtain the loan you’ll find difficult to clear at the right time.
So, if you’re at the cross-road of deciding whether to file bankruptcy or not, you are in the right place.
Right here, I will share with you the advantages and disadvantages of filing for bankruptcy.
Let’s get started. Also, see here for trusted bankruptcy attorneys.
Pros Of Filing Bankruptcy
- Possibility of debt discharge; though not all debt, filing for bankruptcy can relieve the responsibility of paying up some debts. But again, it depends on the type of bankruptcy you’re filing and the nature of your debt. For more insights. Debts that can be discharged through bankruptcy are; personal loans, credit card debt, utility bills, and medical bills.
- Chances For Credit Score improvement; after you’ve cleared all your debts, you can be given a new, clean slate where you can start growing your credit card record again even hit a high credit card score in no time. Think of it as a way to a total transformation that opens the way to better future financial assistance from reputable institutions.
- Debt Stay; this is the main reason a large percentage of businesses who file for bankruptcy go for it. Though it doesn’t automatically clear you off your debt and makes you a free man, what bankruptcy actually does is give you legal protection against debt collection activities from those you’re owing, whether banks or other financial institutions.
- Property Ownership Retainance; no, it’s not what you’re probably thinking right now. I mean, with bankruptcy filed, you have the legal banking to maintain ownership of some of your properties. This way, you always have assets to come back to for a restart after clearing your debts.
Okay, now let’s move to the ugly side of filing bankruptcy.
Cons Of Filing Bankruptcy
- Tax Refunds Denial; this is one of the most daunting realities of bankruptcy. Once you file bankruptcy, just have it at the back of your mind that you can be denied the refund of local, federal, and state tax. Knowing this will help to prepare for the effect that it might have on you or your business.
- Instant ugly impact on your credit report; especially in California, a chapter 7 bankruptcy once filed will remain on your credit report for 10 years.
- Denial of mortgage loan obtainment; heads up! If you’re in a debt with chapter 13 bankruptcy coverage and want to obtain a mortgage loan to clear the pressing debt you have on your neck, it’s impossible. Yes, chapters 7, 13, and 10 deny you access to mortgage loans until your debt is cleared.
Loss of real estate and properties; finally, not all your properties have legal coverage under the bankruptcy you file. Some real estate properties can be exempted.