If you’ve been looking into bankruptcy, you’ve likely heard a lot about the negative consequence associated with the process. For example, your credit score will be negatively affected and the declaration will stay on your public record for seven to ten years, which could affect your ability to get a better job, housing, or future financial assistance.
While these are all legitimate consequences, there are also plenty of reasons why bankruptcy is good. When it comes to debt relief, no option is going to be pain-free or like pressing a magic button. Keep reading to learn more about why bankruptcy is good.
Benefits of Bankruptcy: Why Bankruptcy is Good
Filing for bankruptcy could be a great way for you to reduce or eliminate your unsecured debt. With that said, you won’t be able to have your mortgage or auto loan forgiven during the process. If you prove that you’re willing and able to pay back those secured debts, though, you’ll likely be protected from losing the collateral backing the loans—a.k.a. your house or car.
Chapter 7 bankruptcy can be a quick and efficient way to get out of debt without having to make any payments to your creditors. The liquidation process will also likely take much less time that a Chapter 13 bankruptcy or any other debt relief option.
In many cases, the risks of bankruptcy are often heavily outweighed by the benefits. Being able to free yourself from your debt will allow you to start fresh with no prior obligations to worry about tying up. While your credit score will definitely be negatively affected by the process, rebuilding won’t be too difficult once your old debt are out of the way. You’ll likely be able to take out high-limit credit cards with low interest rates within a couple of years.
Another benefit of filing for bankruptcy is that you’ll be required to create a follow a strict budget to prove that you’ll be able to stick to whatever terms are introduced during the process. Showing progress with your budget might also help your creditors decide to give you some leeway during the reorganization process.
In the end, bankruptcy has negative effects, but it won’t necessarily lead you to financial ruin. In fact, there are plenty of reasons why bankruptcy is good and why considering it as a viable option might not be the end of the world. Whichever decision you do make, however, you should be sure to do your research and never make a decision without weighing all other options first.
If you would like to further discuss why bankruptcy is good, Strategic Debt Relief can offer expert advice regarding your situation. Fill out our short application online and get an immediate response, or call us at 877-297-4477 for a free consultation today.