Many debtors file bankruptcy if they are unable to pay their debts. About the term “bankruptcy”, people have several misconceptions. They believe that all their debts will diminish after they file for it. However, they are unaware of the fact that they have to undergo a series of processes before doing so. Most importantly, they will have to get in touch with a Chapter 13 bankruptcy attorney who can help in following the process. Some of the pros and cons of bankruptcy are explained below:
Merits of bankruptcy
- Get rid of the calls from creditors- It is quite relieving for the debtors to know that they won’t be getting calls from creditors. No lending institute can take action against the debtor until the repayment plan is finalized or the bankruptcy is released.
- Legal assistance- One of the benefits of filing for bankruptcy is that you will be appointed a trustee from the court who will look after your case. You will have to file for bankruptcy to avail of these benefits.
- No need to deal with several creditors- After you have filed the bankruptcy, you don’t need to deal with all the creditors whom you need to repay. You will be able to lead a stress-free life to discover that your case will be handled by an expert.
- Your assets are saved- In Chapter 13 of bankruptcy, you will be able to keep some of your assets after you have repaid them, which is a great relief for many people.
Demerits of bankruptcy
- You cannot get relief for a student loan- In many cases, student loans are exempted from bankruptcy and you have to get in touch with an attorney to know about your options.
- You may lose some value of your assets- In this scenario; the court may decide the value of items to repay the debt. This way, you may lose your car, home, or any item of value.
- Bearing costs- It should be noted that you would have to bear some costs such as court fees and service charges.
- Some debts are not waived off- Some people believe that they don’t need to pay anything after they declare bankruptcy. However, you will have to pay a few of them as decided by the court.
You should contact an attorney who can help you file the bankruptcy in a better way.