Bankruptcy is known to have both negative and positive effects depending on why it is being filed. When filing for personal bankruptcy it is important that you make sure you have pursued all other avenues that are available to you at that point in time. It is important that you understand what you could be getting yourself into when applying for bankruptcy since the effects can be overwhelming to some people. Are you suffering a financial clinch that you want to get out of? Are you considering filing for bankruptcy? Here are reasons why you should reconsider that decision if you have not fully exhausted other options.
- Some debts may not be covered by bankruptcy – there are debts that will not be covered even after you file for bankruptcy. Make sure you are aware of what is covered and what is not. It is therefore imperative before taking any kind of loan to make sure that you know all the terms and conditions of the loan before you engage. Read through the agreement before you sign. Ultimately avoid loans at all costs. Back taxes for past three years and student loans for example may not be covered by bankruptcy protection.
- You may affect your credit history – bankruptcy stays in your credit records for ten years. This is a long time and the consequences could be dire when looking for a loan or a credit card. Some credit card companies will cancel your credit cards once you file for bankruptcy. Getting a loan for example a car loan is almost impossible from many banks. The situation could be better if you still have monthly income. Then the banks can rely on your salary to get you a loan. Remember that having a good credit history is good because it you can easily get a big loan whenever you need one. If you need help visit Atlanta bankruptcy website.
- Stigmatization and humiliation – it is important to remember that filing for bankruptcy is not a secretive process. People will know that you have done it and this can lead to humiliation and stigmatization of sorts. This is particularly because most people think that you are avoiding to pay their money or that you squandered all of the money you had borrowed on things that aren’t helpful. This criticism may not be helpful at all.
- Forfeiting assets – whenever you file for bankruptcy you must forfeit your assets to help in recovering your loans. The only asset they could leave you with is your home.
Considering all these negative effects of bankruptcy it is important therefore to stay away from it and more so seek for bankruptcy help when you find yourself already deep in the menace.