If you’ve been struggling with severe debt, you might be wondering if filing bankruptcy may be able to help. Many people don’t know whether or not filing for bankruptcy is worth it or if it will help with the debt they have. Bankruptcy comes with advantages and disadvantages, and it’s important to understand what these are to know if bankruptcy is right for you. If the pros outweigh the cons for your situation, it could be time to file for bankruptcy.
Here are the advantages and disadvantages of filing for bankruptcy in 2021.
Advantages
Relief from Creditors
On top of the debt you have to pay back, creditors can also cause you constant stress. If you have a lot of debt, you might be dealing with constant calls from creditors, which bankruptcy can help put a stop to. Bankruptcy can also stop some other actions that your creditors might be attempting, like evictions and wage garnishments.
You’ll Likely Keep Your Possessions
Most people assume that one of the disadvantages of filing for Chapter 7 bankruptcy is that your possessions will be taken away from you. It’s true that some do have to give up certain possessions and assets, but this is the case for many people filing for Chapter 7. Many possessions are listed under federal bankruptcy exemptions, so this might not be something you need to worry about. If you need to file for Chapter 13 instead, you’ll also be able to keep your possessions.
It Gives You A Fresh Start
For most people filing for Chapter 7 bankruptcy, one of the major advantages they have is that they’re given a chance to have a fresh start. Debt can be extremely stressful when you don’t have the means to pay it off, and this offers them a second chance. Even if you’re paying off your debts with a payments plan through Chapter 13 bankruptcy,
Disadvantages
It’s Made Public
Unfortunately, anyone can find out if you’ve filed for bankruptcy. This means that people like potential employers and landlords can look up if you’ve filed for bankruptcy, which might negatively impact you. Many people don’t want others to know details about their finances, especially when it comes to bankruptcy, which can be upsetting.
It Hurts Your Credit
Although you’re filing for bankruptcy to make your financial situation better, your credit will take a big hit from it. However, although bankruptcy stays on your credit for seven to ten years after you file for it, this can also be an opportunity to start improving your credit. Keep in mind that serious debt is also bad for your credit, so it may be worth it to file and then work on improving it.
It Might Not Relieve All Debt
It’s important that you understand what bankruptcy cannot do for you, as it can’t help with every type of debt. If you’re hoping that bankruptcy will help you, be sure that the debts you have are dischargeable.
Find Out if Bankruptcy Can Help You
There’s a lot to consider when talking about bankruptcy in 2021: advantages and disadvantages. No one expects you to be a bankruptcy expert and understand the ins and outs of how it works. Bankruptcy can be overwhelming, which is why it’s important that you get the right help. At JPPLaw, Attorney Jason P. Provinzano can help you determine if bankruptcy is the right choice for you and help you through the process if it is.
Contact JPPLaw today to learn more about filing for bankruptcy.
