What is bankruptcy?
Personal bankruptcy is a form of financial protection that enables an individual who has significant financial hardship to erase their debts and start over with a clean slate. In order to qualify for personal bankruptcy a person must be unable to meet their credit debt and the debt owing needs to be greater than one thousand dollars. Listed below are the advantages and disadvantages of bankruptcy.
The one major advantage to declaring bankruptcy is that you will no longer be required to pay off your outstanding debts. Once you have filed for bankruptcy you will also have protection against collection calls, garnishments, and other methods that creditors use to regain borrowed funds.
The disadvantages of declaring bankruptcy mainly lie in the fact that the bankruptcy will remain on your file for seven years. This will make finding creditors to loan you money very difficult after you have filed bankruptcy. If you do not qualify for bankruptcy there are several other options that you can consider. Some of the most popular alternatives to declaring bankruptcy are consolidations loans, and credit counseling.
