Bankruptcy is a financial condition that a person and organization can declare when they cannot repay their creditors or lenders. Not as simple as it sounds. If announced bankruptcy, it badly affects your credit score, and you cannot get any credit from banks or any financial institution. A lawsuit is filed in court when a person declares bankruptcy. Then there is a legal process where all the entity’s outstanding obligations from the company’s assets are assessed and paid (in whole or part).
As we know, that declaring bankruptcy will affect your future earnings, credibility, and self-image. If a person filing for bankruptcy usually finds it difficult to restore their reputation and stable debts, it can be challenging to adapt to a scaled-down lifestyle. Nevertheless, Tucson Bankruptcy Lawyer often provides considerable relief to those trapped by dangerous debt levels. When bankruptcy is declared, the threatening phone and letters requesting payment will cease.
Tucson Bankruptcy Lawyer will help you evaluate the advantages and drawbacks of declaring bankruptcy so that you can make a choice. You must know the advantages and disadvantages of bankruptcy before filing bankruptcy is given below.
Before filing bankruptcy, you should know it depends on the situation you have; this blog will help you to address the pros and cons of filing bankruptcy to determine that bankruptcy is the right solution for you.
Disadvantages of filing for bankruptcy
As you know that bankruptcy filing can affect your financial status and social image for many years, you should consider all your options carefully before filing. Such drawbacks are:
Your real estate and personal property can confiscate. If you cannot exclude all of your personal property or real estate property from the bankruptcy exemption, the bankruptcy court may seize some of your assets and sell to pay your creditors.
Unable to use the credit card- mostly credit card companies cancel your credit card when you file bankruptcy. After filing, you will likely receive several offers to apply for an “unsecured” credit card. That will help you restore your reputation but usually includes higher interest rates and annual fees.
Getting a loan or credit will be challenging – after filing for bankruptcy, you will not get a loan for your new house, study, and job.
Refusal of a tax refund- Due to bankruptcy, state, local and federal tax refunds can be dismissed.
Non-Refundable debts- Some forms of debt may not discharge bankruptcy. Commonly non-negotiable loans include alimony and child support, student loans, criminal reinstatement, fines, and any loans obtained by fraud.
Bankruptcy holds a strong stigma and personal bankruptcy more. However, to avoid embarrassment, it is necessary to enable oneself to take advantage of bankruptcy (see below)
Advantages of filing for bankruptcy
Issue stay against creditors – The court will immediately approve this stay against any debt collection practices after you file bankruptcy. It does not eliminate your mortgage and liability, but it suspends all debt recovery proceedings until the bankruptcy case completes or the moratorium is lifted.
Discharge your debts- You will be entitled to discharge or cancel the obligation to repay those debts. It is a debt that can be liquidated by bankruptcy. These usually include credit cards, medical and utility bills, and personal loans.
Credit Score- While filing for bankruptcy leads to multiple delays in credit ratings, and bankruptcy filings remain on record for 7-10 years, Tucson Bankruptcy Attorney eventually boosts your credit scores after filing for bankruptcy.
There is no need to worry about property seize – An exemption from bankruptcy may allow you to maintain over your assets after filing bankruptcy. If you file for bankruptcy, it means that you don’t have to worry about property seized in bankruptcy. These provisions play a significant role in both Chapter 7 and 13 bankruptcies.
No more financial burden- You can learn to live within your income without a credit card and avoid potential financial catastrophe.
Conclusion: A Tucson Bankruptcy Lawyer will help you decide whether to file for bankruptcy and what type of bankruptcy you should file according to your financial condition. When you plan to file, a Tucson Bankruptcy Attorney will help ensure that your assets/property are protected. All of your debts, financial obligations that can discharge and your creditors do not violate your rights so that you are on the right path to financial recovery when you do your bankruptcy to complete.
Note: Deciding to file bankruptcy is a challenging process for you because you do not know when and how to file. Therefore, you must consult with a competent Tucson bankruptcy Lawyer to decide whether bankruptcy is the best option for you.