Disadvantages Of Bankruptcy

By Author: ClearInsolvency
Total Articles: 20
Comment this article

Filing Bankruptcy can be only solution for you when you are unable to pay the debts to the creditors. But it can go against you in many ways. You have to consider a lot of points before filing bankruptcy as it can hurt you both socially and financially. Following are the disadvantages of filing bankruptcy. So before thinking about bankruptcy gather full knowledge about its drawbacks.

Bankruptcy will not give you full protection

If you are filing bankruptcy because of one of the following reasons then the bankruptcy is useless for you:
Federal Taxes, Student loan and child fees
These are some payments which you have to make in any case and they will not get discharged in any case even in the case of bankruptcy. So make sure that there is some big reason behind your filing for bankruptcy. Do not go for bankruptcy just because you are unable to pay student loan. Because you will get nothing for that and you have to pay the student loan.

Effect on your credit rating

Most importantly, your credit score will get hurt. Bad credit score won't give you anything. You won't be able to get loans ...
... from creditors and banks; you will not be able to get student loan. If your house was sold during bankruptcy then you cannot get loan for a new house unless your credit score is good. So try to keep your credit score good even during the period of bankruptcy. With bad credit rating you can't open a bank account because banks cannot take risk as you have already files bankruptcy.

You cannot pay the remaining debt

If you realize that you can repay the debt to the creditors but you have already filed bankruptcy then there is no way back. Repaying the debt to the creditors isn't going to save you from bankruptcy. You must check your all income sources and see if you can repay the debt. Otherwise, you cannot do anything once you have filed bankruptcy.

You have to pay the fees

There is some fee which is compulsory and filing the bankruptcy isn't going to save you from that. Your bankruptcy lawyer will charge you some amount of money and you have to pay him/her the fees in any case. You also have to sell some of your assets to complete the filing of bankruptcy. So you have to arrange some amount of money before filing bankruptcy.

Make sure you have complete information about the situation you are currently in. Filing bankruptcy is a very big step and you must try all the alternatives before going for it. There is a big chance that you will loose most of your assets during bankruptcy. You can also heir a bankruptcy consultant and tell him/her the whole situation. Getting a professional advice is always recommended in serious cases. That consultant might be able to help you repay your debts without going for the filing of bankruptcy.

About US: Always choose the creditor who offers debt insurance. Like this, there will be no action held against you in case you are unable to pay the debt. Pay your bills and other charges on time. For more details please visit bankruptcy.