what are the pros and cons of filing for
bankruptcy the decision to file for bankruptcy can
be a difficult one it’s important to consider the pros and
cons and make sure that bankruptcy is your best option if used properly bankruptcy can help you out of severe
debt and financial hardship it can be an effective tool to help you
hold onto some of your most important assets while the chapter 7 bankruptcy may
require you to turn over some of your possessions or money to repay your creditors it also
has exemptions that allow you to keep things
like retirement accounts home equity and personal possessions depending on
the exemptions you are entitled to meanwhile a chapter 13 bankruptcy doesn’t require you to turn over your
home personal possessions or all of your savings however a chapter
13 will require that you pay your creditors something toward your debts over a
period of time bankruptcy can give you a financial
fresh start putting a stop to collection calls and
throwing away money on high-interest credit-card finance
charges and late fees regardless of whether your debts are
discharged in a chapter 7 or put into a chapter 13 repayment plan bankruptcy makes these debts manageable
and turns them into something you can handle of course this doesn’t
mean that bankruptcy is a great option for everyone there are
plenty of downsides to bankruptcy the most obvious is that it can severely hurt your credit score making it extremely difficult to obtain
credit and loans in the near future a bankruptcy
may also affect your employment prospects and car insurers may use your credit
score to determine your insurance premiums keep in mind
that bankruptcy does not completely get you off the hook
for your debts for example under chapter 7 some of your
assets may be sold and with the chapter 13 you will have to
pay back some of your debt over a period of
time also debts like most student loans or
certain tax obligations are not dischargeable under bankruptcy and will remain after
your discharge likewise secured debt like your mortgage
or car loan will stay with you if you want to keep your house or car
speak to a bankruptcy attorney to find out if bankruptcy is the right option for you