Demerits of declaring Personal Bankruptcy

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With the recent changes occurring in the finance market, economic downturn has led many individuals to file for personal bankruptcy. It may not be a preferable solution for many but sometimes there are no other options to look forward to. With economical conditions becoming worse, more and more people are tending towards declaring Personal bankruptcy. However you may not be aware of the difficulties associated with the bankruptcy process and as such can end up with severe problems. Mentioned below are some demerits that you should know before you consider declaring Personal bankruptcy: • At times it may look as if it is the only legitimate choice when you are trapped under uncountable personal debts. But the changes in bankruptcy laws in the recent years have made the bankruptcy process a lot stricter than it was previously. Declaring personal bankruptcy is no more an effortless process. By just filling out some forms correctly does not end the process as it was before. The laws are severe and the courts have a significant role to play. Every bit of your financial problem is analyzed and only after you fulfill the eligibility criteria the court accepts your case. If you are unable to present your case well, your declaration may be canceled. • It is upon the court to decide on the bankruptcy chapter that will suit your financial condition. Majority of people prefer filing Chapter 7 bankruptcy as it helps in dismissing nearly all of the bills. However the court may feel that Chapter 13 bankruptcy can be the most appropriate option. Chapter 13 bankruptcy will help in reorganization your financial obligations, lowering your monthly installments and reducing the interest rates. You can be suggested by the court to file chapter 13 if the court thinks it fit. • Your monetary obligations are a combination of different types of personal debts. There are many debts such as federal student loans and back taxes and so on which are not eliminated by personal bankruptcy filings. If the majority parts of your debts are due to these kinds of loans then filing bankruptcy will not be much advantageous. • If you are planning to declare personal bankruptcy remembers to evaluate your bankruptcy status. Get in touch with a capable bankruptcy attorney of your state and get your financial situation examined. The bankruptcy lawyer being experienced in such matters can suggest you the best possible chapters for filing. You may not be aware of the laws associated with the filing process. Taking help from a bankruptcy attorney will help you avoid any legal hassles. • Personal Bankruptcy filing hampers your credit card score to great extent. If you file Chapter 13 bankruptcy it will show on your credit report for the next 7 years. This reduces your chances of getting credit approval for your future loans. Bankruptcy filing is a difficult procedure and involves various legal hazards. Like every other debt relief program personal bankruptcy filing also have certain disadvantages. However these can be avoided if you do not make any mistakes and take decisions only after logical consideration.
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