Bankruptcy might just be the best available option if you happen to find yourself deep in debt and unable to settle your financial obligations. However, you must be aware that bankruptcy filing does have undesirable consequences which can affect your life. On the other hand, filing for bankruptcy is actually good for you to obtain discharge of debts and this may give you some sort of relief from issues you may come across when in the red.The discharge is an irreversible order from the bankruptcy court that relieves you of your debt. Another favorable end result is that declaring bankruptcy prohibits your creditors from attempting to make you pay instantaneously. However, be mindful of undesirable consequences like loss of property and an adverse effect on your credit score.
While the suggestion of declaring bankruptcy seem unpleasant albeit more sensible for lack of better alternatives, it is wise to bear in mind that, in particular scenarios, postponing your bankruptcy can be expensive in the long run.
What happens when you postpone bankruptcy filing?
- You are selling off or cashing in properties to stay afloat and pay off your credit card debts when your properties could have been exempted in a bankruptcy case.
- You lose money on interest because you are just settling minimum amount dues which do not really lower the principal amount of your loan. Going this route will chain you to your debt and in turn, will make you sink deeper and deeper in the red.
- You end up paying more unmanageable interest because you thought consolidating your credit card debts to a single loan is the best option, thus making you struggle further to pay off the debts, and with costlier interests added on.
- You experience undesirable discussions with creditors while attempting to wiggle out of a potential lawsuit. Explaining why the payments were delayed and trying to convince them that you will do your best to keep up with your payments are going to stress you out.
- You are wasting time brooding over your situation when you should be finding ways to get out of the rut and improve your financial future.
Furthermore, waiting until your situation changes for the better can be a disadvantage because it can keep you from being eligible to file a Chapter 7 bankruptcy, leaving you no other choice but to file for Chapter 13 bankruptcy instead. This is unfavorable because in Chapter 13, you will have to settle as much as you can with your creditors during your repayment plan (about three to five years) instead of having your debts written off, as in the case of Chapter 7. Your repayment plan will most likely cost you more money because it is dependent on your income. Had you sought the guidance of a bankruptcy attorney early on, you would have been aware of your options to secure a fresh start. Time is gold. The longer you wait, the more you are delaying your discharge, which is your key to your new beginning. Your time is important. When bankruptcy is the remedy to your financial problem, it is best to get it over with as quick as can be to make sure that you can begin preparing and restoring your financial life. Regardless of an improving or worsening situation, it is best to get in touch with a bankruptcy attorney who will provide the best legal advice that may help alleviate your economic situation.
One of the best bankruptcy attorneys in New Jersey is Karina Lucid. She may be able to assist you and guide you on the most appropriate options available to you. Call us for a free initial assessment of your case.