How appropriate is it to file bankruptcy?

file bankruptcy

Financial stability is what we work hard for all our lives. But certain incidents, frauds or failure in business or job front can sometimes land us into extreme financial crisis. There are many alternatives which one can seek to clear out the heavy debt burden, but in some instances, it gets tough to survive the intense pressure and maintain the same lifestyle and financial freedom. Filing bankruptcy although an extreme step to take, but can help you get back your financial stability with a chance for a fresh start as well ease down the stress and panic caused. Bankruptcy is a court proceeding where judge examines the asset and liabilities of the defaulter and accordingly wave off the outstanding debt. You can get legal assistance from expert law firms like in this regard.

As per a recent study in, it has been discovered that surprisingly salaried class and not the businessman, who are seeking help for filing bankruptcy. Since this extreme decision impacts your future credit score and market image, it is always better to first explore other alternatives before going ahead with filing bankruptcy. Looking for the extra source of income to settle down debt, strictly following the cutdown in the budget or try to negotiate with the lenders for any sort of relaxation in debt due. If these measures do not work well, then the only option to start up again, ease the tension and to avoid the creditors from filing a lawsuit against you is to file a bankruptcy application.

Some of its pros and cons are:
• Wipe out all unsecured debt from your list of due payments: The unsecured debt restricts the creditor to have any authority over your assets. He can not auction your property to settle down his outstanding payments.
• The stay on proceedings come into place: As soon as your submission of signed legal paperwork for bankruptcy gets approved by the court, a legal stay in levied on the proceedings of the creditor protecting you from any harassment calls or collection attempts by credit card companies, banks, and other unsecured lenders.
• Wage garnishment will stop: Once the filed appeal is approved, your salary will no longer be confiscated by the debtors. Hence you can start up fresh by saving and budgeting of your earning.
• You can re-apply for credit: Within a span of 1 to 3 years you are again eligible to apply for any sought of unsecured credit like credit cards, or loans although on a higher rate of interest.
• It is cost-effective: It is a fast and cheapest way to regain a chance to start fresh, eliminate all your unsecured debt without changing your cost of bankruptcy.
• You can avoid harsh limitations of re-filing bankruptcy by following court rules and orders.
• It ruins your credit status for at least 10 years to come, hence it will be difficult to get a secured loan sanctioned easily.
• Although it can limit the unsecured credit lenders from harming you, but cannot restrict the secured loan lenders to confiscate your property and auction it for recovering their outstandings.
• Bankruptcy cannot save you from payment obligations like alimony, child support or the educational expenses, mortgage commitments and tax debts.

Bankruptcy is an expensive and time taking process. Therefore, one needs to make their call to go ahead with it after analyzing all pros and cons.

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