Reasons Why Someone Might Want to Avoid Bankruptcy |
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Below are some of the most popular reasons why someone in a dire financial situation may want to avoid bankruptcy.
They Are a Property Owner This is one of the main reasons why some people try to avoid bankruptcy. The one thing that a Chapter 7 bankruptcy can do, is take your home and used any equity you have into it to help pay off some of your debts. This means that you will lose your home and will have to find somewhere new for your family to live. You may be able to avoid this by filing Chapter 13 bankruptcy instead, which will allow you to pay a portion of your debts for several years and the rest may be forgiven after that. They Have Had a Previous Bankruptcy The thing about bankruptcy is that, after you file the first time, you cannot file again for several years. This means that anyone who has had a recent bankruptcy will need to do whatever they can to avoid bankruptcy in the future, because it will not be granted. They Don't Want to Taint Their Credit Report Some people try to avoid bankruptcy because they are afraid of tainting their credit report; however, this may not be as good of a reason as it seems. If you may be faced with multiple lates, charge-offs, and collections instead, those will likely hurt you worse than having a bankruptcy on your reports. As a matter of fact, many people are able to begin reestablishing their credit history in as little as 3 months after their bankruptcy is discharged, while people with multiple lates, charge-offs, and collections are repeatedly denied new credit -- even from high interest lenders. They Don't Have the Money to Pay a Bankruptcy Lawyer This is a double-edged sword for many people who are in a dire financial situation. On one hand, they cannot afford to pay a bankruptcy lawyer to help them through the process. On the other hand, trying to avoid bankruptcy will only lead them further into debt. This is one reason why do-it-yourself bankruptcies are becoming more and more popular amongst consumers, but they can also be risky. There is a chance that you may make a mistake that could cost you your bankruptcy or you may be targeted by scammers who say they will help you fill out the necessary paper work, but run off with your money or give you botched advice instead. Everyone is in a different situation. While a bankruptcy may be a great relief for some, trying to avoid bankruptcy may be best for others. If you find yourself faced with this choice, you need to take a look at the reasons why you should or should not avoid bankruptcy and use that list to decide which side is tipping the scales more. |
