You have a stack of credit card bills piling up. Your mortgage payment is due soon, and you’re not sure where you’re going to get the money to pay it. You’ve recently faced a large financial emergency which has put an unexpected amount of strain on your finances. Living with debt is hard, and it can be even harder to discuss. This is why for many people, their debt becomes so overwhelming they feel stuck with very few options to relieve their debt. Or so they believe Avoid filing for bankruptcy, at all costs..
When the day comes when you are face to face with your debt, and you need to confront it, your lender may tell you that your only option is to file for bankruptcy. Bankruptcy is a legal proceeding involving a person or a business that is unable to pay its debts. When this happens, the consumer debts are either wiped out or repaid under the protection of the bankruptcy court. In many cases, the debtor’s assets are evaluated and can be used to pay off the debts that are owed.
Your lender or creditor may tell you this is your best and quickest option for debt relief. They may tell you it is your only option. But we’re here to tell you that this is wrong. You have options, and when it comes to debt relief, bankruptcy should be your last resort.
Why you shouldn’t file for bankruptcy
In many ways, bankruptcy is considered to be one of the most severe forms of debt restructuring out there. It’s been said to give those struggling with debt a ‘fresh start’ on their finances. Depending on your financial situation, you may have to file for bankruptcy. But there are a lot of repercussions of declaring bankruptcy you need to be prepared for Avoid filing for bankruptcy.
- You may lose some of your possessions: When declaring bankruptcy, a Licensed Insolvency Trustee must evaluate your assets to decide what to sell to pay towards your debt. This can be anything from liquid assets such as investments or savings you may have to physical assets like a car or, in severe cases, your house. Bankruptcy is an opportunity to start over. However, sometimes starting over can mean that years and years’ worth of investments will disappear.
- It can take a very long time to recover from: With the above being said, it can take many years to recover from bankruptcy. Bankruptcy stays on your financial record for a minimum of six years. This can make it extremely difficult to apply for loans (which may not be the worst thing). It can also take a very long time to rebuild your credit after as well.
- Not all your financial obligations are resolved through bankruptcy: Before you decide to file for bankruptcy, it’s good to evaluate what debt will be affected. There is a big misconception that bankruptcy will clear all your debts. This is untrue. Any secured debts will not be included in your bankruptcy claim. This includes student loans, mortgages, and car loans. Also, any alimony or child support debts can not be included in your claim.
- You still have to pay for bankruptcy: Ironically enough, before you even consider filing for bankruptcy, you must ensure you have the funds necessary to afford it. When you file for bankruptcy, you must work with a trustee who will charge a fee for their services. This can be a big roadblock for those already facing financial hardships.
When you need to file for bankruptcy
Not to say that bankruptcy is the enemy; there are just easier and more efficient ways you can consolidate your debt without taking as big of a hit long term. Bankruptcy has allowed people to restart their finances – which is a good thing. However, the only time you should consider filing for bankruptcy is when it is your only option left. If your debt has become extremely overwhelming and you’ve already looked at every other option, then it might be time to file for bankruptcy to Avoid filing for bankruptcy.
At GetMeDebtFree, we have done the leg work. With over a decade of experience and working with thousands of past clients, we have searched for companies that we trust to help people deal with their debt. If the company does not pass our Gold Standard Test, then we will not recommend their services. If you are looking for the best advice on how to consolidate your debt, fill out our contact form, and we will be sure to refer you to a company that we approve of.
Let it be clear, we do not mine your data nor sell your information to all kinds of companies. We are simply looking to connect people who are serious about dealing with their debt to a professional who is best suited to help make that happen. You have nothing to lose and much to gain, so fill out a contact form and take that first step to a debt-free future.