Financial hard times are never fun, especially if you know you have been doing everything right all along. When things turn south and we lose the ability to recover, one question always comes to the top, what next? Should we try to borrow more money and dig a deeper hole for ourselves, or should we stop for the day by filing for bankruptcy and starting over from scratch? Here are a few things to think about before making that final decision.
The Advantages. The moment you advise your legal team of your intentions; they begin the paperwork; any concerns about creditors will come to a grinding halt. This might not be good for them, but it will be something good for you. One of the biggest reasons for filing bankruptcy may be to protect you from the creditors, but once you have the debt erased; you open the door to begin to rebuild your credit rating. When you file for bankruptcy, as long as you can make the payments towards your home and your car you will not lose them. If you do not owe anything on them, they are protected from your creditors. The best part and probably the most important part of all is that your slate will be wiped clean. It will be your opportunity to start over from scratch.
The Disadvantages. You knew that it could not all be good news, after all, people are not getting back some of the money you owe them. If you choose to hire the Kirkpatrick law firm to handle your bankruptcy case, one of the things they will tell you is that you will not be able to use your credit cards, at least the ones that are carrying a balance anyway. If you had plans of buying a new home or a car, you will need to shelve those plans for a while. Your lawyer will also advise you that if your name was not already in court records somewhere, it will be now. Some of your debts will still have to be paid and will need to be satisfied after evaluation. Anything you currently owe to Uncle Sam in the form of taxes or student loans will have to be taken care of. A major inconvenience for people who file for bankruptcy is the fact that the information will be on their credit history for years. That is ten years that you may or may not be approved for a loan, as you look forward to paying higher interests. Then there is the stigma that society places on anyone who had to take that route, a stigma that usually represents a failure, which is why filing for bankruptcy is a tough decision to make?