If you’re unable to make monthly debt payments and your business is at a total loss, bankruptcy may be a suitable option for you. Although it’s considered to be the last resort, it isn’t as bad as you think. Instead of dragging your sinking ship, it’s better to file for bankruptcy and have a fresh start.
That’s right, guys. Everything has its upsides and downsides, and bankruptcy is no different. The following are a few pros and cons of bankruptcy that you must know before filing for it. Have a look:
It Settles Your Debt
The only way to settle your debts, as well as the tax, is by filing bankruptcy. A lot of people hire financial experts to settle their debts, but guess what? Even they fail to settle the debt and the tax on top of it.
While they may help a little with the interest fee, it won’t help you much when you have a lot of debt hanging on your head. Not to mention, the amount you spend to hire a financial expert is another burden. When you don’t have enough money coming in, every penny counts.
It Gives You a Fresh Start
As mentioned earlier, bankruptcy is the only thing that can give you a fresh start. If you continue making minimum debt payments every month, you’ll remain stuck in this miserable position and your business will keep struggling.
Therefore, bankruptcy is recommended as it can provide you with a safe exit in such a situation. By settling your debts and waiving off your taxes that are older than three years, your business will start re-growing and all the revenue that it will generate will be yours.
It is Sometimes Unforgiving
Once you file for bankruptcy, there’s no turning back. That’s right, my pals. It is perhaps the biggest downside of bankruptcy. Since it is a legal process, there is no turning back once the court is involved in the matter.
Another issue is that it’s a very public procedure. You cannot hide your bankruptcy because of the involvement of the court. People around you will sooner or later know about your financial condition and that may demotivate you a little.
No More Credit Cards
If you’ve made up your mind to file for bankruptcy, please know that you won’t have access to your credit cards anymore. As you know, credit cards lend you bank money and give you a month or so to pay it back.
Such services are not available for those who are in the process of bankruptcy as their future earnings are uncertain. Once the process of bankruptcy is finished and you’re officially done with it, you can reapply for credit cards and use other bank services like leasing a car and stuff.
It Takes Away Your Prized Possessions
Many people file for bankruptcy while having this misconception in their minds that they’ll continue living the luxurious life they had before. Well, it’s a myth as bankruptcy is going to take away many of your prized possessions.
Yes, you cannot keep all those expensive cars, your big house, vacation apartments, and extravagant jewelry if you’re filing for bankruptcy. You may have to lose many such things; however, every state has different laws for it. Thus, be sure to check your state laws for bankruptcy beforehand.
Lastly, I want you to know that it may be a difficult time for you but it will eventually pass. Nothing is meant to stay forever, not even your bad days. I wish you well!