The Pros and Cons of You Filing Bankruptcy

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The Pros and Cons of Filing Bankruptcy. It is important to know the pros and cons of filing bankruptcy, but since bankruptcy is usually the last resort to resolving a debt problem, it's important to be very clear about the differences between the pros and cons of filing personal bankruptcy.

Many experts agree that deciding to file bankruptcy is difficult because stress accumulates rapidly and this is hard to explain because normally people need to file for bankruptcy to allow them to stop the harassing phone calls, to get the collectors off their back, and to simply make interest and recurring payments affordable again.

However, the one thing that the stress does not go away. After all, you are in danger of losing assets and having your credit impaired for about 10 years after filing bankruptcy because you cannot repay what you owe.

Here, we will try to present the advantages and disadvantages of filing for bankruptcy based on different circumstances you might face.

The Disadvantages

The disadvantages include being unable to get a loan and categories of debts are extremely limited. The main disadvantage is that your debtors can take you to court because your failure to pay back the debt can be used as a weapon of protection against them. A major disadvantage is that you will harm your credit to a great extent.

An advantage is that you get a clean slate to start over.

The Pros

The pros of filing bankruptcy include but are not limited to:

I hope you have gained a clear picture of these things and how the bankruptcy process can help you.

You will be granted a new start - eligibility for certain types of loans, the discharge of debt for many people.

After a discharge, you are not necessarily going to have to pay back the debt immediately, but the debt will be included in a bankruptcy discharge.

You will be able to start slowly to rebuild your creditworthiness.

If you have threatened to default on a loan or the creditors have obtained a judgment against you, certain debts are non-dischargeable.

Your creditors cannot come after you for what you owe after you have filed for bankruptcy, but they might still show up to collect the debt.

You can stop the never-ending phone calls from collectors.

You can be relieved from collection harassment.

You can stop foreclosure proceedings.

Your debtors will no longer be able to pursue other repayment plans.

Powers under the automatic stay will be able to go into effect.

You won't have to worry about moving past bankruptcy.

Certain debts won't be discharged, such a recent taxes and child support.

Certain types of debt will not be discharged, such as student loans and certain non-dischargeable debts created through alimony and child support.

Claiming the Elimination of Debts Not Discharged in Bankruptcy - If you want to claim the discharge of certain debts not discharged in bankruptcy, these go through a strenuous process involving the filing and paying of expenses in the 7 years before filing. While you can successfully prove to the court that you have the means to make payments, not being able to get rid of debt on your credit report means that the creditor cannot try to collect the debt from you.

Factors that influenced the US Congress to pass bankruptcy legislation in 1978 include the following:

The undue hardship of consumers in debt was recognized in the 1978 Act.

Ever since, bankruptcy has grown in popularity and has become a more viable debt resolution option, as it may be, for many people.

It’s important to be clear on what is dischargeable and non-dischargeable debt when filing bankruptcy. If you have any questions about the laws and regulations surrounding bankruptcy, please consult with a bankruptcy attorney to have your questions answered.

What is Debt-Skipping-Bankruptcy Law?

Debt-skipping-bankruptcy is legislation in 35 states (called the Streamlined consent order) that allows debtors to formally skip at least a percentage of their debts if they are facing financial hardship.

What are the advantages of having the turbo-Tax or DeLoedy provisions?

The good things about the turbo-Tax or DeLoedy provisions are that you don’t have to worry about paying taxes on the canceled debts, whereas there are usually exceptions to this right. The problem is that it’s very difficult to get this benefit through the bankruptcy process simply because the benefit is usually only available for those with low to nonexistent income to obtain it. Even if you convince a bankruptcy judge that you’re indigent enough to classify any of your debts as exempt, it’s not going to happen. The judges are only interested in your income and the number of your household expenses when they consider this.

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