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The Pros and Cons of Filing for Bankruptcy

April 12th, 2017 Bankruptcy
Pros and Cons of bankruptcy

Filing bankruptcy can mean a fresh start, though it is certainly not the right choice for everyone facing financial difficulties. If you are considering filing for bankruptcy, it is important to learn as much as you can about the pros and cons that may affect your unique situation.

A Primer on Bankruptcy

Many people choose bankruptcy because they do not realize they have other options, or they have already exhausted the alternatives. The best way to determine whether filing for bankruptcy is right for you is to consult an Arkansas bankruptcy attorney who can answer your questions and provide professional advice. Then, you can carefully weigh the pros and cons of filing for bankruptcy and make a realistic and informed decision.

The Pros of a Bankruptcy Filing

The main advantage to filing for bankruptcy in Arkansas is that it is possible to have a clean slate, and essentially restart your financial goals. If you are unable to pay off outstanding debt, it may slow down progress toward those goals. However, removing that debt can change things drastically. While bankruptcy does not always remove all debt, it does address most types of debt. A Chapter 7 bankruptcy filing deals with debt removal, while Chapter 13 is based on a reconfiguration of how debt is repaid. Both options can be good choices, though Chapter 7 is only available to those who qualify.

For married couples considering filing for bankruptcy, one advantage is that you can both individually possess less debt. You can also avoid a joint filing if one spouse can prove they are the only one with excessive debt in their name. There are some specific details that must be addressed when couples file for bankruptcy. For example, when only one spouse decides to file for bankruptcy, it can still affect the other spouse. Working with a bankruptcy attorney will ensure all legal implications are understood and followed properly. It is crucial to have a good legal advocate to reduce the chance of an incorrect filing.

The Cons of Filing for Bankruptcy

Of course, there are several potential disadvantages to consider before you decide to file for bankruptcy, including:

  • Damage to your credit score
  • Difficulty obtaining approval for credit cards
  • Difficulty buying a car or home
  • Legal and court fees
  • Potential loss of property

It is important to remember that these issues are temporary and can improve with time. As your bankruptcy filing ages, your credit score can begin to rise. Over time, people who file for bankruptcy can buy homes and cars, as well as qualify for credit cards with low rates and appropriate credit limits. Being patient and working to rebuild your credit after going through bankruptcy is essential for reaching your financial goals.

Filing for bankruptcy can have a positive impact on your life. If you are considering filing for bankruptcy, contact an Arkansas bankruptcy attorney at Nolan Caddell Reynolds today by calling 866-242-0452. An attorney can help determine whether bankruptcy is right for you, which type you should file, and what types of challenges you may face after filing.

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John T