What are the Pros and Cons of Filing for Bankruptcy?

large family home

Nobody wants to think about what would happen if they had to foreclose on their home. However, if you are in serious debt, there is a good chance this will happen unless you file for bankruptcy. There is an unfair stigma attached to filing for bankruptcy, and the word itself can give some people chills. Fortunately, it is not as scary as you may think, and may even be exactly what you need to finally breathe a sigh of relief.
If your wages are being garnished, creditors have obtained judgments against you, your bank account has been frozen, or you are no longer financially capable of paying your credit card or medical bills, there is a very good chance you are ready to file for bankruptcy. If you find yourself in this situation, here are some of the questions you may have regarding your legal options going forward:

How can filing for bankruptcy help me?

There are several benefits to filing for bankruptcy, most notably being the automatic stay. Homeowners are relieved to know that they will not be thrown out on the street. When you file for bankruptcy, an automatic stay is immediately imposed on all your creditors, which allows you to keep your home while preventing creditors from pursuing all collection activities. Some of the additional benefits of filing for bankruptcy are as follows:

  • You may discharge your obligation to repay any of your dischargeable debts
  • Many debtors will begin improving their credit rating after you file
  • You may go through the bankruptcy process without losing any of your property–in some cases, you may keep your car, your home, any pensions, IRA’s and retirement accounts, up to $10,000 in value of household goods, life insurance policies, and more

What are the downsides of filing for bankruptcy?

While there are several pros of filing for bankruptcy, it does not come without consequences. This is why you must contact an experienced bankruptcy attorney to learn about the best route for your specific situation. Some of the downsides to bankruptcy are as follows:

  • It may raise your insurance premiums
  • Bankruptcy will be noted on your credit report for 7-10 years
  • You may find it difficult to get a new credit card or line of credit
  • It may negatively impact your ability to get a job in the future
  • Some landlords are leery of those who file for bankruptcy

Contact our experienced New York firm today

Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.