Pros and Cons of filing for bankruptcy

If you are thinking about filing for bankruptcy, it is important to know the pros and cons of bankruptcy before you file. For most homeowners, they would either be filing under Chapter 7 or Chapter 13 provisions.

Pros

1. The most obvious reason is that the debt will be forgiven. However, certain debts like student loans, fines and child support will not be discharged.
   
2. The debtor is protected by federal courts for any legal actions that the creditors may try to impose. For example, the creditor calls will stop. When you file for bankruptcy, your creditors are no longer able to contact you for collection of the debt.
3. Certain properties are exempt and can be protected from being seized and liquidated. The debtor is also protected by law from discrimination. For example, an employee cannot be terminated based on bankruptcy filing.
   
4. Bankruptcy stops most wages garnishments. When you claim bankruptcy, your trustee will notify your employer, the court and the creditor to stop the wage garnishment. However, bankruptcy does not stop the garnishment of your wages by the court.

Cons

1. A bankruptcy stays on your credit report for 10 years. This can have long-lasting effects on acquire credit, get a car loan, get life insurance, or sometimes get a job.
   
2. A recent bankruptcy makes it nearly impossible to get a mortgage 
   
3. You still have to make payments to your creditor based on your income, and may have to pay an administrative charge. 
4. You will loss any non-exemept asset. This include retirement savings or any other property. Properties will be sold off to pay any outstanding debt.
   
5. Certain debts are not discharged after the bankruptcy. Examples include student loans and back taxes.
6.  You will lose all your credit cards. 
   
7. Finally, the embarrassment of having to file for bankruptcy often leaves debtors emotionally scarred.

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See more at​

•  http://www.businessnewsdaily.com/3973-bankruptcy.html
  
• https://www.consumeraffairs.com/finance/bankruptcy_02.html