Bankruptcy is an option that is used by many to come out of their financial problems. It is normally the beginning of a new financial life for the many people who have no way of paying their debts. It is a stressful process but without it, the debtor will have harder times in the future.
Financial distress should not be taken lightly and one should think about it carefully before making the move. This is because it has long term effects on the debtors financial life. One effect that bankruptcy has on the individual is that, the record stays on ten years after filing the petition under chapter 7. It is therefore quite difficult to obtain credit from a lender before the period has elapsed.
In case one is lucky enough to obtain credit, they will pay a higher interest rate as opposed to an individual who has no debt at all. Everyone who has gone to court to seek the protection of the court against the creditors always has a second chance of rebuilding their credit. Getting a loan will be a second chance to build your credit worth.
Bankruptcy could lead to the destruction of perfect relationships. Innocent creditors are hurt by the action taken by the debtors when they cannot pay off their debts. As such, they live with fear of ever working with such an individual since they may not pay their debts for a second time. A debtor should always seek the guidance of an attorney or a legal advisor who can be of help in determining other options available for him. In case other options may not be appropriate, filing a petition might be the only way out.
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