Many people see bankruptcy as a last resort, but in reality, going through bankruptcy can be a wise choice for those experiencing financial difficulties and desiring a fresh start. It can be an act of empowerment rather than something you are forced into. One reason why many people think that filing for bankruptcy is the last possible option is because they think that it will have a long-term negative effect on their credit. Whether or not this is the case can depends on the type bankruptcy you file.
In fact, research has shown that those who choose to file for bankruptcy rather than opting to struggle through the tough times eventually see better credit scores, on average. But when deciding whether to file for bankruptcy, it’s a good idea to consider your situation.
If you are struggling with repayments to the point that it is putting a strain on your day-to-day life, say, having to choose between putting food on the table or paying a credit card bill, then bankruptcy might be a good option for you.
Likewise, if you find yourself wondering whether you should liquidate your pension or 401k plan to pay off debt, then you probably should be considering a bankruptcy instead. If bankruptcy proves to be the right choice for you, it can relieve you of some or all of your unsecured debts, provide a structure for paying others, and put you on a path to protect certain types of assets, including 401(k) and pension plans.
Filing for bankruptcy can mean a fresh start and give you the option to pay back debts without compromising your credit score. To learn more, contact the bankruptcy lawyers at the Quinn Law Firm for a free initial consultation.
Source: Huffington post, “The fresh start of bankruptcy may restore credit faster,” accessed Oct. 20, 2017