Are you asking, “Is filing for bankruptcy worth it?” If you’re trying to figure out if it is right for you, read this article to learn more about bankruptcy.
There are times when you may feel that you’ve got no other choice than to file for bankruptcy, but is filing for bankruptcy worth it? Would working with debt relief firms be a better option instead? Here we are going to explain the different types of bankruptcy filing options that there are to choose from.
Some of this you may know and some you may not, but there’s no need to worry because everything you need can be found in this brief yet explanatory guide.
Is filing for bankruptcy worth it?
It’s essential that when deciding on whether bankruptcy is the right decision or not that you compare your options.
Is bankruptcy a good option for you? First, you must understand bankruptcy is the last possible choice when it comes to gaining debt relief and essentially allows you to start over financially. You must also know each form.
The first form of bankruptcy is Chapter 7 bankruptcy. This form of bankruptcy is when you liquidate all your assets. After the bankruptcy filing has taken place, you can no longer be pestered by creditors seeking to collect a debt. It takes anywhere from 3-6 months to complete this process.
The following form is Chapter 13 bankruptcy, and this option is like signing up for a repayment plan. What happens is the court will decide on the way to consolidate your debt into lower payments. For example, if you’ve got multiple student loans or a mortgage and want to reduce them.
It would give you more time to pay it off over a more extended period. The final form of bankruptcy is Chapter 11. This is the form of bankruptcy that targets businesses seeking to consolidate their debts and pay it off over a longer time.
Bankruptcy filing: Yes or no?
There are some things that you must take into consideration before making the final decision to file or not. The things that would make filing a great idea are if you have debt in large quantities across various credit cards, loans, company debts, etc. Filing for bankruptcy, in this case, will free you from having to pay it back.
It may be helpful if you don’t earn enough income to pay it all at once. The deferment plan allows you to pay the debt off slowly over time without facing high penalties.
Not a good idea
Just like there are reasons that filing for bankruptcy will work, there are also reasons why it isn’t the right choice for you. The first reason is when the debts you’ve built up over time don’t qualify to be diminished by the bankruptcy guidelines.
Another reason it’s not a good idea is if you can’t afford the credit hit. When you file for bankruptcy, while you do get to start over financially, you’ll have to rebuild your credit as well.
The big break
Is filing for bankruptcy worth it? In the end, the final decision must be made by you because it will affect you and your family the most. While there are some cases where it may be beneficial, there are also some instances that it’s not a good idea.
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