With the poor economy and the sub-prime housing bubble, many people are in debt and struggling to make ends meet. For people who feel that there is no way they can ever hope to repay their debts, bankruptcy is an option that many consider. While filing for bankruptcy has its advantages, there are also some significant downsides to consider. Here is what you should know about it:
What Is It?
Bankruptcy is when you declare that you have more debt and financial obligations than you have income and assets. Unsecured debts such as credit card debt, outstanding medical bills, and certain types of loans are essentially erased. Any of your non-exempt assets will be sold to pay for as much as your debts as possible. However, most people who file bankruptcy do not have non-exempt assets. A non-exempt asset would be something like a second home or a highly valuable heirloom or collection of some sort. After you file through your Bankruptcy Lawyers in Marion IN, creditors and debt collectors will no longer be allowed to contact you.
What Are The Downsides?
Your credit rating will show that you have declared bankruptcy for 10 years after you file. This will make it difficult for you to obtain credit cards or loans in the future. Employers can deny you a job and landlords can refuse to rent to you as well. While it does give you somewhat of a fresh start, you can have trouble getting new employment or purchasing a car or home even if you are financially more stable.
How Do I know If I should File?
You should think long and hard before deciding to file for bankruptcy. Here are some situations where you should consider it:
You are constantly getting harassing calls, emails, and letters from debt collectors
You need to use credit cards to pay for necessities like food, utilities, and shelter
You consistently can only make the minimum monthly payment, if any payment at all, on your debts
It is a good idea to go over your finances and speak with your creditors. Find out if there is an acceptable payment plan you can participate in to pay your debts or refinance your loans. Also speak with a financial counselor or Bankruptcy Lawyers in Marion IN to see what they recommend for you. Visit Ripke Law PC for more information to help you decide what is best for you.
