Pros and Cons of Declaring Bankruptcy

Whether you're looking to start a new business or are already in over your head, you need to weigh the Pros and Cons of declaring bankruptcy. Declaring bankruptcy will leave you with a negative credit score for seven to ten years, and can put your business at risk of being closed down. However, if you do want to start over, there are many alternatives. In fact, some people have managed to get bad credit small business loans. Although declaring bankruptcy may be a step in the wrong direction, it is a necessary step in the right direction. Bankruptcy can provide significant relief from debt, including tax liabilities that are more than three years old. Declaring bankruptcy can also stop creditors from harassing you and pursuing collection efforts. Bankruptcy can also stop the harassing phone calls and letters from creditors. However, filing for bankruptcy is a serious decision and requires legal help. In addition to the benefits and disadvantages of declaring bankruptcy, you should make sure to seek legal advice. Bankruptcy is a complex area of law, and the courts strongly recommend that you hire a bankruptcy attorney. While filing for bankruptcy may seem like an easy option, it's crucial to speak with a qualified attorney to make sure you are making the right decision. The Law Offices of James F. Aspell, P.C. provides free bankruptcy consultations. As with any legal decision, bankruptcy can affect your credit score. Bankruptcy will stay on your credit report for 10 years, which will make it difficult to get a new mortgage. It can also make it difficult to obtain a new job or a life insurance policy. Finally, not all debts can be eliminated through bankruptcy. Some debts are non-dischargeable, such as alimony, student loans, criminal restitution, and debts acquired through fraud. Despite these disadvantages, bankruptcy does provide an opportunity to start fresh. Filing for bankruptcy can have a negative psychological effect for some. Bankruptcy carries a stigma, which can have a lasting impact on your professional life and personal relationships. While filing for bankruptcy is an excellent option for many, it is not a good option for every business. Therefore, you must weigh the Pros and Cons of declaring bankruptcy and make a decision based on your needs. There are two main types of bankruptcy: Chapter 7 and Chapter 13. The former is a simple and fast method of eliminating debt and allowing you to keep working and meeting your expenses. The latter is more complex and allows for a business to continue operations. However, it does not remove all unsecured debt, such as student loans and taxes. It's not an option for people who earn more than $36,000 a year. While filing for bankruptcy wipes out most debts, most will not. For instance, alimony and child support, most back taxes, and student loans aren't discharged. However, if you have collateral loans or other forms of nonexempt property, bankruptcy can help you keep a reasonable credit payment history. While bankruptcy can lead to reduced debt, it can leave you with a history of exorbitant interest rates.