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Bankruptcy, the Good and the Bad
When you are facing some difficult financial decisions because of problems with your credit, it is a good idea to have all the facts about each option available to you. Lack of information is your biggest enemy when you are looking for a solution to your financial problems. If you don’t understand all of your options it will be difficult to make the right decision.
Bankruptcy for you
Bankruptcy has to be considered as one of those options even if it is one we all wish to avoid. There is a stigma to "going bankrupt" that makes it seem like using this financial option is a terrible curse. But the bankruptcy laws are put there to help anyone whose financial problems threaten to overwhelm them. In fact, it's best to view the bankruptcy route as something that was set up for your benefit and to know the advantages and disadvantages of bankruptcy so you are well informed even if you never have to go through with the procedure.
The biggest advantage of bankruptcy is that in almost every way imaginable, it is a new start on your finances. Bankruptcy is a legal procedure so you will have to speak to a professional bankruptcy advisor if you wish to file for bankruptcy. The good thing about that is once the process begins, your representation will get notification out to all of the financial institutions you owe money to. From that point on they must stop billing you or calling requesting payment during the bankruptcy process, so even if the process of going through bankruptcy lasts several months, your credit accounts are idle for that time frame. This fact alone can give a lot of people financial relief.
Lose your debt
Once your bankruptcy goes through, in a very real way, your debt will disappear. Every credit account you owed money on will be closed and the debt will vanish. That can be a tremendous relief if you have been fighting credit card debt and loan repayments for years. The bankruptcy laws are there to leave you able to use your income for your immediate needs to pay for your housing, food and utilities. You can still keep a bank account open so you will in many ways return to the lifestyle that you had before you opened your first credit account.
Effects of bankruptcy
The negatives about bankruptcy begin with the damaging effect on your credit rating and your ability to get credit for many years. Essentially, for a period of time that is usually 6 years, you will not be able to obtain credit at all. That takes some getting used to and there are functions such as online shopping and getting a rental car that you simply will not be able to do because you will not have a credit account to use.
There are also costs associated with bankruptcy that go to the legal representation you us to walk you through the process. You must prove to the court that you are eligible for bankruptcy and if you are unsuccessful, they may deny you the ability to declare bankruptcy and impose some form of debt management instead. While that is not a terrible outcome, it means weeks or months of time and the expenses of going for a bankruptcy are wasted. The professional advisors at Debt Response have years of experience providing fair and honest debt advice so will be able to tell you in minutes whether you are eligible for bankruptcy. This alone could save you a lot of time and money.
Call us today on 0800 781 7878 for free bankruptcy advice.
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