Recovering from Financial Ruin

Recovering from Financial Ruin

3 Factors To Consider Before Ruling Out Bankruptcy As An Option For Debt Relief

by Veeti Lepisto

Filing for bankruptcy is something a lot of people want to avoid, primarily because of the negative effects it can leave; however, using bankruptcy to get relief for your debts might turn out to be the best decision you ever choose. If you are on the fence about this and are trapped with loads of debt, you may want to consider the following three factors before you toss out the idea of filing for bankruptcy.

Other alternatives do not offer complete relief

When it comes to debt relief, you will find that there are several different methods available, and all of these are designed to offer debt relief. Unfortunately, the alternative options you can choose will not offer complete and instant relief from your debts. These options will help you develop a plan to repay your debt, but you are likely to still have debt for at least three to five years.

With Chapter 7 bankruptcy, you can have instant relief from your debts as soon as you file. This means you will no longer owe money to your creditors, and your creditors will no longer have the right to try collecting the money you owed them.

Other options also harm your credit

If you are worried about the effects bankruptcy will have on your credit, you should realize that alternative types of debt relief can also negatively affect your credit. When you choose a debt consolidation program, for example, your credit will be affected. Creditors do not always report properly to the credit bureaus when borrowers use consolidation programs, and your credit report may get hard inquiries on it simply from filing a debt consolidation plan.

A Chapter 7 bankruptcy filing will stay on your credit report for 10 years; however, this does not mean your credit will be bad for the full 10 years. As soon as you file, you can begin looking for ways to boost your credit score. If you take the right steps, your credit could be good within just a few years.

The fees may vary

When you choose bankruptcy for debt relief, you will pay one amount. This amount will cover the entire bankruptcy case, and you will never have to pay anything else for it. With debt consolidation plans, you may not really know how much your fees will be in all. Companies that offer these often have hidden fees that you may not realize, and you will probably have to continue paying these fees until your case is closed after three to five years.

After considering these three factors, you might discover that bankruptcy could be the right choice for you. To learn more about this and other types of debt relief options, contact a bankruptcy attorney such as Dennis Lee Burman Attorney at Law.


Share

About Me

Recovering from Financial Ruin

Several years ago, one of my best friends married the guy of her dreams. This tall, quiet man adored my friend. Almost every week during their courtship, he presented her with a beautiful, fragrant arrangement of flowers. At the time, my friend’s mom joked that her home resembled a funeral home because of all of the flowers her boyfriend sent her. After the happy pair married, they purchased a new home together and quickly began running out of money, meaning that he could no longer afford to give her the flowers she loved. They even discovered they couldn’t afford to pay the monthly mortgage. After only a few years of marriage, they filed for bankruptcy. On this blog, you will discover the ways a reputable bankruptcy attorney can help you successfully recover from financial ruin.