The advantages and disadvantages of filing for bankruptcy
Disclaimer: Nothing posted here should be considered legal advice.
When I speak to my clients, most of them are not too sure whether bankruptcy is right for them and I think this is a good thing. Filing for bankruptcy is not something that should be taken lightly, but at the same time it is not something that we should be afraid of.
One of my roles is to help you determine if bankruptcy is right for you because the truth is that bankruptcy is not right for everyone because everyone’s situation is different.
Filing for bankruptcy certainly has a lot of advantages. The biggest advantage is getting a fresh financial start. Often we can work together to discharge most of your unsecured debt like credit cards, medical bills, and judgements. If creditors are threatening to take away your car, home or if creditors are garnishing your wages, filing for bankruptcy could help protect you from losing your property.
Often when my clients come to me, their entire world is falling apart. Their marriages are strained and anxiety levels are through the roof with feelings of guilt, remorse, helplessness and hopelessness.
Most people don’t talk about this, but one of the biggest advantages of filing for bankruptcy is that at the end of the bankruptcy process, most of my clients feel like they are a new person with a renewed sense of purpose in life. This is my favorite part and in my opinion the biggest advantage of filing for bankruptcy.
But to be clear, there are also disadvantages to bankruptcy depending on your situation. Depending on the bankruptcy route chosen, it could lead to losing your property, a negative mark on your credit history for as long as 10 years, discrimination (although there are laws to protect against most discrimination), the costs involved in filing for bankruptcy, and often the biggest hindrance is that my clients just feel like they are bad people for filing for bankruptcy.
The truth is you are not a bad person for filing for bankruptcy. As attorneys, we often use shorthand by calling the process “filing for bankruptcy” or just “bankruptcy” for short, but what it really is, is filing for bankruptcy protection. That’s the key right there: protection. Bankruptcy is protection for you, your family, and property from creditors and many of the other consequences that go along with debt. This idea of protecting people from creditors was so important that our founding fathers incorporated right into the U.S. Constitution!
So, these are just a few of the advantages and disadvantages that are involved with bankruptcy. If you are wondering if bankruptcy is right for you, I encourage you to contact us and let’s work together to find the right solution for you.