There are times where in people are left with no choice but to file for personal bankruptcy, particularly when they can no longer pay their overwhelming debts. Before filing there are things one should consider as there are pros and cons. First one should consider whether or not it is really necessary. Think long and hard about this and seek a pre-bankruptcy counseling session with the right counselor or attorney.
Filing for bankruptcy will relieve you from the pressures of being harassed by your creditors. This act can discharge you from most of your personal debts thus, giving you the chance to make a brand new start that is free from any form of anxiety. While in bankruptcy, all collection from your creditors will be halted. However, you will still need to continue paying your personal loans such as mortgages and car loans. If you are a tenant, you will still have to pay your rent when filing.
Filing for bankruptcy will save some of your assets. Those that are considered as “exempt" by law can never be taken by creditors to settle your debts. You will be allowed to keep those necessities such as furniture and the rest of your family's possessions. Also no creditor can take possession of your pension rights. You may even be allowed to keep your home and car, unless you have substantial real state equity or an expensive car.
There are some disadvantages that you need to consider before making a final decision. First your credit profile will be affected. Bankruptcy can stay your credit report for 10 years. Aside from this, you might end up losing your property if the type of your credit is indispensable. In such cases, filing will not resolve your problem; in fact, it may even hurt you more.
You also need familiarize yourself with the types of personal bankruptcy in order to come up with the best possible strategy. Then have your situation assessed and understood by a professional to see if you should really file or not.
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