Idea! Debt Consolodation

Bankruptcy File Bankruptcy Chapter 7 Bankruptcy Chapter 13

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Bankruptcy

BK Pros n Cons

Advantages

• It alleviates financial distress by pardoning or reducing your debt that was incurred from any number of circumstances such as illness or loss of a job.
  
  
• It can give you time to put your finances in order, and prevent dire circumstances by temporarily prohibiting creditors from seeking foreclosure of a home or repossession of a car.
  
  
• It can also temporarily prevent wage garnishment, debt collector harassment, and disconnection of utilities.

 Disadvantages

• Filing for bankruptcy can blemish your credit history, as it will be reflected in your credit record for 10 years. With your credit record tainted, it will be harder to purchase a car or buy a house.
  
  
• If applying for credit cards, you may be approved only for secured cards, or cards that offer higher interest rates.
  
  
• Given that bankruptcy is a notice of public record, it may be seen by potential employers, insurance companies, mortgage businesses, and other lenders, which may cause an irreparable damage to your social and financial status.
  
  
• You must also remember that bankruptcy does not discharge debts such as alimony and child support; most student loans; certain federal, state, and local taxes; debts from criminal activity; legal fines and penalties; and debts not listed on bankruptcy papers. Luxury purchases made within 60 days of filing are also not included.