At one point or another, the average American goes bankrupt. Being in debt means pressure from debt collectors, physical and emotional stress, mental health problems. All of which could arise because of the fact that the debt is too much. Debt collectors may seize your house or precious and valuable things. Many bankrupt people tend to develop insomnia overtime because of all the stress and tension surrounding them! What to do? How to get out of bankruptcy? Should you choose a lawyer?
While you may come across many advertisements and may hear of many attorneys and lawyers specialising in bankruptcy law, do not be tempted. They can help relieve you of most of your credit but be warned, the long term benefits just aren’t worth filing a case for bankruptcy.
Reasons Why You Shouldn’t File A Case For Bankruptcy
- Once you file a case for bankruptcy, your name may go on the credit record for as long as 10 years. Credit records are generally open to the public. This can seriously impact your future in case you were looking for a new job or a new house for rent. The employer or the landlord may look at the credit records, only to find that you had been bankrupt. They may deem you as unreliable and not worth the risk. You would not even be eligible for a small loan from the bank. Unless you were willing to pay it back in a short time period with extremely high interest rates.
- Many people have the wrong perception about filing for bankruptcy. Filing for bankruptcy does not mean that all of your debts will be relieved. Some will be relieved but not all of them. For example, student loans, child care, taxes or any amount incurred due to fraudulent acts.
- Filing for bankruptcy means that you will have to liquidate your assets. Your house, your office, your precious and valuable things, your jewellery. Anything and everything that can pay off your creditors. You will lose all or most of your assets. However, you may be allowed to keep the things that are essential for your job. You may also be allowed to keep personal belongings such as clothing and some furniture.
- Any prized possession you will have, the judge or your trustee may order it to be seized. The seized possessions will then be sold on an auction. It can be anything: a lake house, a family heirloom, a part of land, etc.
However there are situations when filing for bankruptcy may be a good idea. While debt collectors cannot really sue you for not paying the debt, if you have many accounts with big banks, these banks will sue you. They have the resources, they have the power. In such a case going into bankruptcy will be a good idea as it can actually help you repay the bank. Always speak to a lawyer or an attorney who are experienced in bankruptcy before filing for a bankruptcy case. Make sure you have covered all the options available to you.