Pros and Cons of Bankruptcy
Discuss your personal financial circumstances with a qualified bankruptcy attorney as the Federal Bankruptcy Laws are as complex as they are powerful. Your rights to retain the property and discharging of your debts depends on your fact-specific circumstances.
Pros of Bankruptcy
- Cancels most if not all of your debt
- Provides you with a “fresh start”.
- As a result of having your debts canceled, it gives you a positive attitude to deal with life’s other stresses and responsibilities.
- Allows you to keep your car if you remain current on the payments.
- If you own a home, allows you to keep your home if you remain current on the payments.
- If your home is in foreclosure, allows you to avoid foreclosure and make monthly payments on the past due amounts or the time to refinance or sell your home.
- Does not prevent you from obtaining credit.
- Does not prohibit you from paying selected creditors after your bankruptcy is filed.
- Prevents creditors from making a claim after the bankruptcy is filed even if you later win the lottery.
Cons of Bankruptcy
- The “fresh start” envisioned by the bankruptcy law is only obtainable every 8 years.
- For 10 years, your credit report will show that a bankruptcy was filed.
- You may have to wait 2 years before you can buy a home, although some lenders allow for home loans after one year.
