Understanding The Advantages And Disadvantages of Filing Bankruptcy

Jan 09, 11 Understanding The Advantages And Disadvantages of Filing Bankruptcy
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by Arnold Stecker

Advantages and Disadvantages of Filing Bankruptcy

If you’re looking for bankruptcy advice then there’s a good chance you have a lot of debt and you are in need of financial relief.  Unfortunately, although everybody’s debt situation is different many people immediately turn to bankruptcy as a solution.  It’s important to understand what happens during bankruptcy so you can investigate and understand any possible alternatives that are available to you.  You or one of your creditors can file for bankruptcy.  This lets the record show that you are not in a position to pay all or some of your debt at the current time.  The insolvency court will receive your bankruptcy petition and they will evaluate your situation in order to decide whether or not you are eligible to declare bankruptcy.

One of the obvious advantages of bankruptcy is that you are immediately relieved of your debt obligations.  If you are feeling weighed down by the financial burdens which are too difficult for you to handle, this may be the best route for you to take.  Your creditors will be satisfied since your assets will be divided up amongst them as a way for them to recoup some of their losses.

But, I’d like to fill you in on some of the disadvantages of declaring bankruptcy.  The hardest thing for a lot of people to deal with is giving up control of their assets.  You can potentially even lose your home, as well as your life insurance and pension too.  Money gained from insurance settlements and inheritances is also at risk.  You’ll could lose your bank accounts and credit cards, and it will take you years to repair your credit.  A bad credit report can make you ineligible for certain jobs and make it harder to rent an apartment or buy a home.

A possible substitute to bankruptcy that you’re most likely unaware of is the IVA, or Individual Voluntary Agreement.  An agreement of this nature is both legally binding and formal.  This is not a mandatory contract forced upon your creditors, but something they have to be willing to agree to before it can go into effect.  If you can get three quarters of your creditors to accept your offer then you’ll be able to have them all legally bound by this legal agreement.

If you need help getting this started, you should contact an Insolvency Practitioner.  If you cannot afford one, you can always just create an informal agreement among your creditors.  Not only will choosing this path will make it harder for you to accomplish your goals, but the deal is also not legally binding.  Bankruptcy is a huge financial decision and it is imperative that you explore all of your options before embarking down this precarious path.

Here’s more information on bankruptcy advice.  Visit canifilebankruptcy.com and find out everything about debt assistance that you’ll need to know.

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1 Comment

  1. The information provided on the advantages and disadvantages was very useful.It is always good to know that their are blogs so dedicated to providing information that is seriously concerned with the reader’s needs.Thanks for sharing your insights with us through your blog.

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