Bankruptcy has become a modern day blight for Americans. People want immediate gratification. If they don’t have the money, they resort to using credit. Credit grows and grows and bills follow. For some people, bankruptcy is the only answer. Nevertheless, there are a lot of people who initiate bankruptcy before first attempting some simple remedies. The number one piece of advice that should be heeded is “Avoid Bankruptcy.”
Bankruptcy should never be your 1st choice. Although bankruptcy, as a debt remedy, can be considered a necessary financial move, it should be resorted to after all other alternative debt solutions have been exhausted. There are numerous critical negative consequences to bankruptcy, including the possibility of losing your automobile or home, an unfavorable impact on your credit report along with possible severe limitations to future credit. Even though bankruptcy has a number of positive aspects, it is wise to do everything in your power to avoid bankruptcy. Responsible financial management is the best approach towards avoiding bankruptcy. Fortunately, there are a number of ways to avoid bankruptcy.
The simplest and most effective way to avoid bankruptcy is to be financially responsible and living within one’s financial capabilities. If you maintain control of your finances, you will have no problem avoiding bankruptcy. However, if you’re already heavily in debt and facing insolvency, there are alternatives to bankruptcy. These include debt consolidation, debt settlement, and/or agreements with creditors. All of these alternatives should be seriously considered before the decision to declare bankruptcy is made.
Reasons To Avoid Bankruptcy
* Destroyed Credit History: One’s credit history is severely damaged by Bankruptcy. It stays in the Credit report for ten years from the discharge date and remains in court records for twenty years. The most undesirable aspect of having one’s credit impaired so severely for so long is that future prospects for credit-dependent loans and employment will be severely diminished due to the negative effect on one’s credit report.
* Repossession Of Property: The result of a b bankruptcy declaration can be the loss of assets of value (non-exempt property) or cash value equivalent.
* Tarnished Social Status: Bankruptcy (personal) can impair your social standing within your community and business relationships.
* Business Damage: Bankruptcy filing by a business proprietor can destroy opportunities for a growing business. The reason is that the impaired credit rating resulting from bankruptcy disqualifies him/her from obtaining business loans.
* Severe Financial Emergency: Upon being officially declared bankrupt, all of your bank accounts and credit cards will be closed. Whatever you may be leasing, such as your automobile will be delivered back to the owner immediately, thus causing a tremendous financial burden.
* Handicapped Life Prospects: Individuals that have declared bankruptcy might experience extreme difficult buying or renting a home or automobile, buying insurance and/or obtaining security clearance. This can lead to a lot of problems & put a big question mark on the chances of having a standard & secured living. Consequently, the best advice is to avoid bankruptcy altogether.
Whether or not to declare bankruptcy is a personal decision which only you can make. Bankruptcy is a serious matter and the record of it stays on your credit history for 10 years. Since there are several forms of bankruptcy available, it is advisable for you to consult with an attorney specializing in this field before proceeding. Some individuals are able to avoid bankruptcy through debt consolidation measures either on their own or with the assistance of non-profit credit counseling agencies.