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What are the pros and cons of filing for bankruptcy?

When Tennesseans get trapped under the crushing weight of debt, the challenge of breaking free can seem impossible. But there are options available. One option is to file for bankruptcy. Doing so can be the first step towards putting that debt in the rear-view mirror. But, at the same time, filing for bankruptcy is not for everyone.

What are the pros and cons of bankruptcy? Let's start with the downsides. Bankruptcy will mean losing all of your credit cards as well as non-exempt property, such as luxury possessions and non-essentials. Bankruptcy will also make it hard to get a mortgage. Part of the reason is that the bankruptcy will hurt a person's credit score for up to 10 years.

Other negatives are that bankruptcy will not cure all debts. For example, bankruptcy is not away to escape alimony, child custody or student loan debt. Although, of course, eliminating other debts leaves more money to pay these non-dischargeable debts the bankruptcy process is not available to eliminate these types of debts.

Now for the positives. Losing credit cards is not necessarily a bad thing. Indeed, for many people, credit cards caused the problem, so taking a break from them can be a benefit. And, in any event, people can often get new credit cards with one to three years.

Another positive is the quick relief that bankruptcy can provide. The Chapter 7 process often takes only three-to-six months. That means a person is only three-to-six months away from being free from debt payments, defaults and the threat of repossession - all of which can harm a person's credit score.

Tennesseans interested in finding out whether filing for bankruptcy may be right for them may benefit from speaking with an experienced bankruptcy attorney.

Source: FindLaw, "Pros and Cons of Declaring Bankruptcy under Chapter 7," Accessed October 25, 2016

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
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