If you’re finding yourself in a financial situation where you can’t seem to find a solution, bankruptcy could be a viable option. Bankruptcy is a viable option for some, but it’s not right for everyone. Here are some things to consider before making a decision about filing for bankruptcy.
Your Finances Will Be Scrutinized
When you file for bankruptcy, you essentially hand over all the details of your finances to the court for review. You will be asked about purchases you have made in the past and debt you have incurred. Every receipt, bank statement and financial document will be reviewed under a microscope. If you’re uncomfortable with this level of scrutiny, you might want to consider another option, such as debt consolidation.
Your Spouse’s Finances May Be Reviewed, Too
If you’re married with joint tax returns or bank statements, your spouse may be susceptible to the same level of scrutiny that you will undergo. Since the line of separation between personal and joint finances in your marriage may be blurred, your spouse may experience personal invasion of privacy.
All Your Debts Won’t Disappear
Even after bankruptcy, you may still be responsible for some obligations. Debts like child support and alimony will remain your responsibility, as will any outstanding student loans. Debts incurred from being sued will also remain. You should consider this carefully, especially if the sum of these debts after bankruptcy could still prevent you from getting back on your feet financially.
The Benefits of Filing for Bankruptcy
For many people, the benefits of filing for bankruptcy far exceed the cons. For one thing, bankruptcy gives you a fresh start. You are free to start a new credit history, and learn from your past mistakes without being penalized for them. After some time has passed, you’ll be able to avail of all the credit benefits of everyone else, including getting approved for credit cards, a mortgage loan and other things. Finally, one of the intangible benefits of filing for bankruptcy is being able to sleep at night, knowing that you are debt free.
Experts generally advice that bankruptcy should be only be undertaken when you have exhausted all other options. A bankruptcy attorney can answer your questions about your individual situation. In some cases, they can help you to explore alternatives that will help you to avoid bankruptcy and retain your financial integrity. If bankruptcy is determined to be the right option for you, your attorney will guide you through all the steps.