The word bankruptcy often carries a negative connotation and considered by many to be an option only in the most drastic situations. While this is the belief by a number of individuals, bankruptcy can also be viewed as a fresh start for others. By filing bankruptcy individuals have the opportunity to erase past debts and start over again. Bankruptcy can often be considered as a viable option especially if the individual is financially overwhelmed with credit card debit or financial requirements that cannot be repaid. Although this is appealing to a number of individuals, there are numerous negative ramifications an individual will face if they do decide to declare bankruptcy.
The most obvious effect bankruptcy has on an individual is the negative financial effects. The most common type of bankruptcy that is declared in the United States is chapter seven bankruptcy. If the case is won, this type of bankruptcy will completely eliminate the debt of the individual. Although this sounds appealing, the credit of the individual is severely damaged for the next ten years. This makes it difficult to acquire a loan from a bank as credit is very important when applying for a loan.
Without the ability to acquire a loan, the individual may therefore find it difficult to buy a home or condo without the help of friends and family as well as a cosigner. As overwhelming as this may seem, credit can be rebuilt. With a fresh start due to bankruptcy, the individual has the ability to rebuild their credit so that it is some day it is possible to acquire a loan from a bank. A negative credit score can be fixed and should not be the end all if the individual is in serious debt.
Another factor to keep in mind is reputation. This should not be the main deciding factor when weighing the positive and negative aspects of filing bankruptcy, but it is something to keep in mind. Filing for bankruptcy will often cause the individual to appear in a negative light. In smaller communities the individual may be the talk of the town as news often spreads faster in smaller towns. Along with that, filing of bankruptcy shows up on personal records. This means that anyone who is willing to go to the trouble of examining personal records will be able to see that the individual filed for bankruptcy.
There are a number of solutions that one can utilize in order to minimize the effects of bankruptcy. One of the best ways to prepare for this choice is to take an online bankruptcy course at startfreshtoday.com. These classes help the individual truly weigh the pros and cons of declaring bankruptcy and make it possible for the individual to make the best possible decision. Filing for bankruptcy may be a last resort for a number of individuals but at the same time, it may be the right choice for a number of individuals as well. Making the right choice can make all the difference when it comes to declaring bankruptcy.
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