Bankruptcy can be a good thing, but it also has some negative consequences. If you plan to file for bankruptcy, it’s smart to look into all of your options before you do. However, if you think that bankruptcy may be right for you, seeing the positives and negatives in a simple list could help you solidify your choice.
Bankruptcy has many positives to consider. Some of them include:
- Being able to complete bankruptcy in only around three to six months with Chapter 7 bankruptcy or up to five years with Chapter 13 bankruptcy
- Being able to eliminate unsecured debts as you emerge from bankruptcy
- Potentially being able to access new lines of credit within one to three years of filing (the interest rate may be high)
- Protecting you against aggressive collection action
- Stopping harassing phone calls
Of course, with all the possible positives, there are also some negatives to think about. These include:
- Not being able to eliminate student loan debt in most circumstances
- Making it harder to get a mortgage if you want one in the future
- Having to explain yourself and how you found yourself in dire financial straights
- You may need to pay some of your debts, like mortgage liens, child support or alimony, regardless of the outcome of the bankruptcy
At the end of the day, it’s up to you to decide if bankruptcy is the right decision for you. Your attorney can talk to you more about bankruptcy and what to expect. Our website has more on personal bankruptcies and how to begin your application.