Thursday, March 19, 2009

BANKRUPTCY – PROS AND CONS

There can be certain situations in life where a person has no other choice but to file for bankruptcy. Filing bankruptcy can have a mixture of effects. It can be a boon to a person and can also be a curse to another. So it is better to be acquainted with the pros and cons of filing bankruptcy as this will help a person to analyze the effect of it on the financial future of that person and also help that person to act accordingly. So let’s have a look on the pros and cons of filing bankruptcy.

The best thing in filing bankruptcy is that the person who has filed bankruptcy will now have no debts left with him to pay off. All the debts or most of the debts will be removed. There will an absolute new beginning. Creditors will not be allowed to make any collection calls and also any legal proceedings from the lenders part will be stopped after bankruptcy is filled. This will relieve the person from the trauma and harassment and will help the person to rest in peace. Even if a person is required to pay off certain debts, the amount will be reduced to a great extent making it much easier to pay off. Last but not the least the person can retain certain assets as per the exemption.

But the consequences are more disastrous. The most dreadful full effect is that the credit report of the person will be hampered to a great extent. The report of filing bankruptcy will be in the report for at least 7 – 10 years. In that period getting new credit is very difficult. A person needs to wait at least two years to get a loan or credit. Even after two years if a person wants to have a loan then he or she will be getting it at a very high rate of interest. Some times the employers judge a candidate by the credit history of a person. So if there is a record of bankruptcy in the credit report it can affect the employment opportunity of that person.

So bankruptcy is a step to be taken with utmost care. Otherwise It can ruin you and your family.

Posted by Saul at 12:49 AM  

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