The Good the Bad the Ugly of Filing Bankruptcy

The Good the Bad the Ugly of Filing Bankruptcy "Individuals must consider the advantages and disadvantages of the bankruptcy process in light of the fact that a large number of Americans continue to file for bankruptcy. In general, the majority of individuals always consider the benefits of declaring bankruptcy prior to the disadvantages. I believe that this is how most individuals are wired. Prior to considering the disadvantages of any situation, the majority of people will always consider the positive aspects. It's the age-old ""what's in it for me"" mentality. Our world has become narcissistic, and this is likely why the United States has such a severe debt problem. Not only is the government in dire straits, but the average American's debt-to-income ratio exceeds 150%. That is absolutely insane. What's even stranger is that banks continue to lend people money. It's almost as if they deliberately set individuals up to fail. Another reason for this is that when a person is buried beneath a mountain of debt, the negatives can sometimes vanish due to the tension of the situation.The automatic stay is one of the most advantageous aspects of registering for bankruptcy. At the time the bankruptcy petition is filed, the automatic stay is implemented, halting all collection efforts against the debtor. No more late-night phone calls threatening the individual with dire consequences if they do not pay the debt collector immediately. The automatic stay is so effective that it halts all unlawful activity, including wage garnishments, wage foreclosures, and lawsuits. If the creditor wishes to communicate with the debtor, they must do so through the bankruptcy attorney. Creditors' collection strategies have become increasingly aggressive in recent years, making the automatic stay an important asset of a bankruptcy filing. When creditors exceed acceptable behavior, a bankruptcy attorney can put them in their place.The only true disadvantage of declaring bankruptcy is the damage to one's credit rating. A bankruptcy filing can remain on a credit report for as long as ten years. The good news is that bankruptcy does not prevent a person from obtaining credit. Creditors are opportunists who recognize that many hardworking Americans are essentially debt-free after filing for bankruptcy. As long as they have left their bad behaviors in the past, they are suddenly attractive credit candidates. Automobile loans are one of the simplest forms of credit to obtain following bankruptcy. It is secured by the property, for starters. The disadvantage is that many of these creditors will demand exorbitant interest rates and a substantial down payment. Unless absolutely necessary, it is preferable to simply delay.The primary advantage of filing Chapter 7 bankruptcy is the discharge. The brilliance of Chapter 7 is that the entire process takes only four to six months. In addition, the bankruptcy discharge will eliminate all unsecured debts, leaving the individual virtually debt-free with the exception of secured debts such as a car loan or mortgage.
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