Six Things to Know Before You Officially Declare Bankruptcy 

Are you on the verge of bankruptcy? Drowned in debt? Struggling to make the ends meet? Unable to pay your monthly bills? Having difficulty buying the necessities? If yes, you’re definitely on your way towards bankruptcy.

Still, I would recommend you not to give up. I suggest you explore all your options before declaring bankruptcy. Yes, it’s true that bankruptcy gives you a fresh start and erases all your debt, but that’s not all. It has its pros and cons.

In this article today, I’m going to highlight all the significant merits and demerits of bankruptcy. If anything, it will give you the clarity you need before making the decision. So, let the countdown begin:

Bankruptcy Can Make Your Tax Liabilities Go Away 

Do you have tax liabilities worrying you? Can you clear out the desk and pay all your due taxes on time? If yes, you’re good to go. In case you cannot manage to pay your taxes, bankruptcy can help you. Yes, it can make your old tax liabilities go away, but remember that they need to be older than three years.

Bankruptcy Cannot Help You with Students Loan 

There is no way to get rid of a student loan, whether you choose a debt management plan or bankruptcy. In the case of student loans, bankruptcy can only prevent aggressive collection efforts and buy you some time from your creditor. So, you can take advantage of the benefits of paying off student loans earlier and set them to a lower interest rate.

Bankruptcy Can Put Your Name in the Public Records

Bankruptcy is not something that you’ll declare just by saying it or making an announcement. The bankruptcy petition is filed in a federal court, so it puts your name in the public records. Once your case is closed, your creditors are informed to stop pursuing all the debts you owe.

Bankruptcy Can Put a Full Stop to Lawsuits 

Not being able to make debt payments on time will bring a lot of lawsuits your way. As a matter of fact, it is something that makes such times more miserable. The pressure, the deadlines, and the debt payments, all these things make matters worse. Bankruptcy can put a full stop to it. Nobody can file a lawsuit against you once you declare bankruptcy.

Bankruptcy Can Take Away Your Luxury Possessions 

Declaring bankruptcy is a major life decision. It isn’t a piece of cake. Yes, bankruptcy may take some of your luxury possessions. You cannot own a million-dollar house and those luxury cars once you’ve filed bankruptcy. Although every state has different laws for bankruptcy, it usually includes all your luxury possessions.

Bankruptcy Can Give You a Fresh Start 

Closing the article on a bright note; it’s indeed correct that bankruptcy provides you with a fresh start. It is the only way to close your pending payments, settle your existing debts, and erase your tax liabilities.

After that, you can finally take a fresh start and focus on your life once again. When you stand at square one, things become more and more clear. Bankruptcy can clear out your path and provide you with the clarity to move on.

Thus, there are both pros and cons of bankruptcy. I suggest you weigh them down before you officially file for it. Good luck, guys!

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