Bankruptcy: The Last Resort or a Fresh Start?

Bankruptcy: The Last Resort or a Fresh Start?

Some people see bankruptcy as a last resort when they are in serious financial trouble. Whereas others see bankruptcy as a reset button to have a fresh start after a major financial setback. Examining the pros and cons of filing for bankruptcy may help you decide whether to choose bankruptcy as your financial option. Talk to a Chattanooga bankruptcy attorney to find out more.

Pros and Cons of Bankruptcy

The pros and cons of bankruptcy may help you decide whether bankruptcy is the right decision for you. Some of the most common pros of bankruptcy include erasing debt and preventing the loss of your financial assets. However, the catch is that not all debts can be erased.

Most unsecured debts can be eliminated with bankruptcy but not all secured debts can. Secured debts are harder to discharge in bankruptcy because they include properties like vehicles or homes that can be seized if payments are missed. This means that even after filing for bankruptcy, any unsecured debts that were not discharged could still involve losing a home or vehicle if payments are not made.

Not all financial assets can be kept after bankruptcy either. Each state has different laws on which financial assets and properties are exempt from bankruptcy. One of the cons of bankruptcy is that you may lose some of your belongings, financial assets, and property to pay off debt as part of the bankruptcy deal.

Other cons of bankruptcy include the legal fees for filing for bankruptcy, the stressful process of filing, and financial challenges afterward. These financial challenges include a lower credit score which makes it harder to buy cars, purchase homes, and obtain personal loans. You might have to deal with rejection at first or higher interest rates and monthly payments than before. Some jobs will deny employment if a security risk is involved.

Deciding Whether to File for Bankruptcy

The decision to file for bankruptcy is not an easy one for anyone to make. However, there are certain situations when filing for bankruptcy may cause more harm than good. For example, bankruptcy will not always help you escape secured debts like car loans and home mortgages.

Bankruptcy will not erase alimony, child support, student loans, criminal fines, or taxes. Some people may not want to file for bankruptcy if their valuable assets could be liquidated in bankruptcy. Find out which assets are exempt from bankruptcy by checking your state laws.

Those who are able to find other ways to escape debt may not want to go as far as filing for bankruptcy. There are multiple other options like consulting with a lawyer with financial experience, debt consolidation, debt forgiveness, budgeting, and debt management plans.

Call Tom Bible Law Today

Filing for bankruptcy can be a daunting decision to make. Feel free to call us at Tom Bible Law today at (423) 424-3116 for a consultation about your bankruptcy options. Our dedicated team of Tennessee bankruptcy lawyers is prepared to help you explore various options for bankruptcy to help you decide whether this is the right choice for you. We can be found in the Tennessee cities of Chattanooga and Tullahoma.

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