When you’re evaluating the pros and cons of bankruptcy, you shouldn’t simply list them in their respective columns and then make a decision based on which number is greater. Instead, you need to decide how important each of the individual pros and cons is to you as well. You’ll make a much better decision that way, whether you’re deciding whether to file for any type of bankruptcy protection at all or deciding which particular type to file for. To help you with that, we will briefly review some of those pros and cons that are universal to all forms of bankruptcy and one or two that are relevant to one specific form or another.
Peace of Mind
No matter what type of bankruptcy protection you file for, one benefit you will experience right away is the fact that the collections calls you have been receiving will immediately stop. The reason for that is that from the moment your bankruptcy proceeding begins, it is illegal for your creditors to contact you. That benefit alone is one that many people who have gone through this process have really appreciated. If you’re contemplating bankruptcy, then you’re probably getting these calls on a daily basis. So, to have them finally stop can bring you a tremendous level of peace of mind all by itself.
You Can Still Obtain Credit
Another benefit of bankruptcy that’s present regardless of the type you’re pursuing is the fact that despite what you may have been told, you will still be able to obtain credit even after your bankruptcy proceedings have been finalized. As a matter of fact, you will almost immediately receive offers from various credit card companies that want to help you rebuild your credit. The reason for this is that they know you won’t be able to file for bankruptcy protection again for several years. They also know that at this point in your life, you’re likely to be very interested in rebuilding your credit as quickly as possible.
Your Credit Won’t be as Attractive
The credit offers you receive immediately following the finalization of your bankruptcy can be either a blessing or a curse, depending on how you handle them. After all, it could have been the abuse of credit that brought you to the point of bankruptcy to begin with. If you are going bankrupt for some other reason, then you don’t have to worry about this as much. However, if you have had some bad habits in the past, then it is vitally important that you make every effort to change them going forward. Remember, the offers of credit you receive after bankruptcy are going to be high interest offers, so if you aren’t careful, you could end up in a worse situation than you were in before your bankruptcy.
You Might Still Have to Pay
Another factor you should remember is that depending on which particular type of bankruptcy protection you file for, you may still have to pay some of your debts. For example, education loans and tax debts are not typically discharged even in the most extensive forms of bankruptcy. What’s more, there are some forms of bankruptcy in which your debts are not discharged at all. They are merely restructured. Your attorney will make you aware of the specifics of your situation.