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Five reasons to avoid declaring bankruptcy

Five reasons to avoid declaring bankruptcy
"""For some, bankruptcy is a necessary means of reestablishing their financial stability. In certain instances, bankruptcy is the only viable option for coping with overwhelming debt. In spite of this, there is a reason why bankruptcy carries such a negative connotation in American culture: its effects can be extremely detrimental and long-lasting. Here are five compelling arguments against filing for bankruptcy.1. Legal FeesAlthough you can file for bankruptcy on your own, it is recommended that you employ an attorney to assist you with the paperwork and proceedings. Unfortunately, attorneys are not inexpensive, charging $200-$300 or more per hour on average. This is a quick method to incur several thousand dollars in additional debt prior to filing for bankruptcy.Your Credit RatingA bankruptcy will negatively impact your credit score for at least seven years. Creditors begin to view you as a high-risk borrower, which results in higher interest rates and a greater likelihood of loan rejection. There are methods for regaining credit, but they require time and perseverance.3. Creditors Are Not the Only Ones Checking Your Credit ScoreCreditors are not the only ones evaluating you based on your credit history. It is now common practice for employers to check your credit report before employing you. Insurance companies are also known to investigate their clients' credit scores and have even charged those with lower credit scores higher premiums.The negative stigma associated with bankruptcy.Filing for bankruptcy can be an emotionally taxing process. It is not unusual for a person to become despondent, discouraged, or feel like a failure. In our culture, bankruptcy is viewed as something disgraceful and negative. For instance, almost all applications inquire whether you have ever filed for bankruptcy, similar to how they inquire whether you have ever committed a felony. Although there is nothing immoral or illegal about declaring bankruptcy, it can frequently have unanticipated side effects.New bankruptcy laws impose stricter guidelines on bankruptcy claims.Since the 2005 Bankruptcy Reform, it has become more difficult to file for bankruptcy, and those who do so frequently end up paying back a substantial portion of their debt. The courts are no longer dissolving debt as readily as they once did, so bankruptcy may not provide the debt relief you seek.If you wish to learn more about avoiding bankruptcy, consider speaking with a professional in Debt Elimination. He or she will be able to assist you in analyzing your unique situation and determining the best course of action.""
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"Five reasons to avoid declaring bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 143 times and generated 1 comments. The article was created on and updated on 02 June 2023.
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