Bankruptcy has become a modern day blight
for Americans. The best piece of advice that should be considered
is to "Avoid Bankruptcy."
People want
immediate gratification. If they don't have the money, they resort
to using credit. Credit grows and grows and bills follow. For
some people, bankruptcy is
the only answer. Nevertheless, there are a lot of people who
initiate bankruptcy before first attempting some simple remedies.
Bankruptcy should
never be your 1st choice. Although bankruptcy,
as a debt remedy, can be considered a necessary financial move,
it should be resorted to after all other alternative debt
solutions have been exhausted. There
are numerous critical negative consequences to bankruptcy, including
the possibility of losing your automobile or home,
an unfavorable impact on your credit report along with possible
severe limitations to future credit. Even though bankruptcy has
a number of positive aspects, it is wise to do everything in
your power to avoid bankruptcy.
Responsible financial management is the
best approach towards avoiding bankruptcy. Fortunately,
there are a number of ways to avoid bankruptcy.
The simplest and most effective way to avoid
bankruptcy is to
be financially responsible and living within one's financial
capabilities. If you maintain control of your finances,
you will have no problem avoiding bankruptcy.
However, if you're already heavily in debt and facing insolvency,
there are alternatives
to bankruptcy. These include debt
consolidation, debt settlement,
and/or agreements with creditors. All of these
alternatives should be seriously considered before the decision
to declare
bankruptcy is made.
Reasons To Avoid Bankruptcy
- Destroyed Credit History: One's credit
history is severely damaged by bankruptcy. It stays
in the Credit report for ten years from the discharge date
and remains in court records for twenty years. The
most undesirable aspect of having one's credit impaired so
severely for so long is that future prospects for credit-dependent
loans and employment will be severely diminished due to the
negative effect on one's credit report.
- Repossession Of Property: The result of
a b bankruptcy declaration can be the loss of assets of value
(non-exempt property) or cash value equivalent.
- Tarnished Social Status: Bankruptcy (personal)
can impair your social standing within your community and business
relationships.
- Business Damage: Bankruptcy filing by a business proprietor can destroy opportunities for a growing business. The reason is that the impaired credit rating resulting from bankruptcy disqualifies him/her from obtaining business loans.
- Severe Financial Emergency: Upon being officially declared bankrupt, all of your bank accounts and credit cards will be closed. Whatever you may be leasing, such as your automobile will be delivered back to the owner immediately, thus causing a tremendous financial burden.
- Handicapped Life Prospects: Individuals
that have declared bankruptcy might experience extreme difficulty
buying or renting a home or automobile, buying insurance and/or
obtaining security clearance. This can lead to a lot of problems & put
a big question mark on the chances of having a standard & secured
living. Consequently, the best advice is to avoid bankruptcy
altogether.
Whether or not to declare
bankruptcy is a personal
decision which only you can make. Bankruptcy is a
serious matter and the record of it stays on your credit history
for 10 years. Since there are several forms of bankruptcy available,
it is advisable for you to consult with an attorney specializing
in this field before proceeding. Some individuals are able
to avoid
bankruptcy through debt consolidation measures either
on their own or with the assistance of non-profit credit counseling
agencies.
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