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The Pros And Cons Of Declaring Bankruptcy

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Green & Green Law
The Pros And Cons Of Declaring Bankruptcy

Facing bankruptcy can be thoroughly overwhelming and extremely intimidating. Due to the presence of some myths, bankruptcy has a negative connotation among most people. However, in reality, it can be used as an effective financial tool by those who need financial stability. When the debt exceeds the assets and it becomes tough for you to pay your creditors, bankruptcy turns out to be the only alternative.


Many of us consider bankruptcy in the wrong direction. But declaring bankruptcy at the right time provides high relief to the filers. Along with the benefits, they also have to face new challenges that make it tough for them to rebuild their credit as well as secure their loans. For a business owner declaring bankruptcy usually feels like giving up but can give them a fresh start and also turns out to be one of the best ways to save the business. For declaring bankruptcy individuals, as well as businesses, usually prefer hiring a professional bankruptcy attorney in Meridian. Having a professional attorney by their side helps them know all the processes, in's, out's, and requirements of it.


Along with hiring a bankruptcy attorney knowing the pros and cons of declaring bankruptcy makes it easy for them to decide whether they should declare it or not. If you too are facing bankruptcy and are confused about making the right decision then here are some pros and cons that may help you make the right decision.

Pros Of Declaring Bankruptcy


Clears most debts:-


Declaring bankruptcy help you in clearing most debts. It gives you a fresh start to reset as well as get going again. By declaring bankruptcy people struggling financially, gets the opportunity to pay down some portion of their debts over time. Declaring bankruptcy helps them get rid of some of their debts entirely.


Blockage:-


Declaring bankruptcy acts as a blockage. It grants an automatic stay to the sufferers, which acts as a block on their debt and prevents creditors from the further collection. Declaring bankruptcy help you save your money. It blocks creditors from deducting the amount from your bank account. This also prevents them from checking your wages or look your other assets.


Save wages:-


Declaring bankruptcy plays a major role in saving wages. Once you are bankrupt, it becomes easy for you to save money from your wages. It also does not include any limit on the amount that you are allowed to save. With this declaring bankruptcy help, you save your future. It becomes easy for you to save for your retirement.


Protects assets:-


Many times, declaring bankruptcy at the right time as well as under the supervision of a professional bankruptcy attorney helps to protect the assets. Along with some personal exemptions, you are allowed to keep your assets such as car, home, or retirement accounts. However, the exemptions also depend on the value of your assets and the state laws where you live.


Cons Of Declaring Bankruptcy


Affects credit rating:-


One of the major cons of declaring bankruptcy is the credit rating. Declaration of bankruptcy affects your credit rating. With this people trust you less as well as it becomes tough for you to borrow or apply for a loan in the future. A record of bankruptcy usually remains on the credit record for up to 7-10 years. This affects future finances. However, consulting a professional bankruptcy attorney help you learn how to rebuild your credit rating.


Legal actions:-


Many times after declaring bankruptcy people have to face potential criminal charges. This usually results when they prefer doing everything on their own and do not have any expert advice. When the information provided while filing for bankruptcy turns out to be wrong or false, it increases the chances of potential criminal charges. Before taking any such major step, many people prefer hiring a bankruptcy attorney in Meridian. This helps them provide the right information to the court and make sure that they are completing each requirement properly.

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