When an individual decides to file bankruptcy they should consider all pros and cons of the situation. The idea of bankruptcy is to protect an individual from further monetary damages. As such, if the option to file for bankruptcy is an option that makes thorough sense, it will fall under these categories:
No other option. After attempting to negotiate with creditors to find repayment plans and you are denied.
Liabilities exceed assets. When a person owes more to different companies than they have in their bank account.
Want to keep your IRA. Money collected in the form of IRAs is saved whether or not an individual files for bankruptcy.
After bankruptcy is filed, a person may run into some negative things that can haunt them and their credit record. For example, after bankruptcy is filed, it stays on a person’s record for up to ten years. Other than feeling a mental and personal strain, after bankruptcy is filed, a person may not be able to borrow from other creditors.
Prior to deciding whether or not an individual should file bankruptcy, it may be advisable to contact a legal representative or a credit counselor. These individuals may be able to help create some sort of payment plan as well as suggest which type of bankruptcy to seek. Regardless, it is important to consider the outcomes of each option when considering whether or not to file for bankruptcy.