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Bankruptcy Isn't A Dirty Word

Bankruptcy Isn't A Dirty Word
"""Are you considering bankruptcy? Everyone desires to avoid defeat as much as feasible, and this includes filing for bankruptcy. It would likely be a person's lowest point in existence. Statistics indicate that the majority would want to avoid the ordeal as much as possible, and for good reason. Filing for bankruptcy does have negative effects on a person's credit, which can remain on credit reports for years. Conversely, if you are truly in a position where you cannot pay your debts, not filing for bankruptcy will have a similar influence on your credit. There may come a time when filing for bankruptcy is the wiser option. What are the advantages and disadvantages of declaring bankruptcy? Read on to discover!

Disadvantages:

We will begin by discussing the disadvantages of declaring bankruptcy so that you have a clear understanding of what will occur following this procedure.

• Credit is temporarily compromised. A bankruptcy filing will have a negative effect on your credit score, which will remain on your credit report for seven to ten years. Therefore, this effect will diminish with time and as you add positive actions to your credit report.

• Greater difficulty obtaining loans. As a direct result of the preceding disadvantage, it will be more difficult to obtain loans once your bankruptcy becomes public knowledge and is reflected on your credit report. It would be extremely difficult, if not impossible, to qualify for one.

Increased difficulty in obtaining employment. In addition to examining a potential employee's criminal background and other typical factors, it appears that some companies are also examining credit records. Sadly, some view a bankruptcy history as a valid reason not to employ a candidate.

Advantages:

Even with all the negative effects bankruptcy would have on an individual, there is a positive aspect that must be considered. Keep in mind that bankruptcy exists to prevent individuals with debt and financial problems from becoming worse off. Therefore, you can anticipate the following positive outcomes from applying for bankruptcy:

• cessation of contact with creditors. A person with significant debt and financial difficulties would likely have frequent contact with creditors and financial institutions owed money to. When an individual files for bankruptcy, a legal protection is established that prohibits creditors from contacting them. This safeguard is known as a """"automatic hold"""". This protection will also stop foreclosure threats on your properties, asset repossession, litigation, wage garnishment, and many others. You can opt out of phone calls and other forms of contact from these individuals and organizations.

• A clean slate. After declaring bankruptcy, the next significant financial step is starting over. If you are in debt, it would be more difficult to improve your financial situation than if you were starting from scratch.

Assuming that your bankruptcy case was successful, you will be in much better financial shape than before you filed for bankruptcy, when you were deeply in debt. Depending on how you impart knowledge from this adversity, it will likely strengthen your future. They say that mistakes are the greatest teachers in life. Attending a debtor education course will aid you in avoiding similar financial difficulties in the future, in addition to the experience gained. Obviously, most people would prefer to avoid bankruptcy, but if you are in dire financial straits, you should consider the pros and cons of filing to determine if it is in your best interest to do so. Additionally, consult a reputable bankruptcy attorney to ensure you comprehend the procedure and your legal rights. If you determine that bankruptcy is your best option, there are steps you must take to rebuild your credit after it is discharged, but it is possible.

Remember that bankruptcy is not a shameful word, so don't be embarrassed and don't do it alone!""

" - https://www.affordablecebu.com/
 

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"Bankruptcy Isn't A Dirty Word" was written by Mary under the Finance / Wealth category. It has been read 104 times and generated 0 comments. The article was created on and updated on 31 May 2023.
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