Dealing with financial problems can result in an overwhelming amount of stress. For many, declaring bankruptcy has provided the ideal solution for debt relief and an opportunity to gain the fresh start they need to get back on track with their finances. However, it’s not necessarily the best option for everyone, which makes it crucial to fully understand the advantages and disadvantages of filing before making such a major decision. As the leading bankruptcy law professional in Colchester, CT, Gilbert P. Kaback, Attorney at Law, has helped numerous clients achieve financial freedom when their debt has become more than they can bear. Below, he shares the pros and cons of filing for bankruptcy.

Pros

Under bankruptcy law, an automatic stay is implemented as soon as a filing has been completed. This will immediately put a stop to creditors contacting you about your debts and keep them from garnishing your wages.

Depending on the type of bankruptcy you file, your financial obligations will either be discharged or you will be allowed to create an affordable repayment plan. Once your case has been resolved, you will get the chance to begin rebuilding your credit fairly soon. While it is disheartening to file for bankruptcy, it is sometimes the only choice to get out of financial trouble.

Cons

Unfortunately, bankruptcy will stay on your credit report for several years, making it difficult to take out loans, get a mortgage, or open new credit cards. You might also be required to give up non-exempt property to help pay for your debts. In addition, bankruptcy is only effective if the majority of your debt falls into the dischargeable category. This usually leaves out child support or alimony, tax debts, fines from breaking the law, and student loans. 

Petitioning for bankruptcy is not a decision that should be made lightly. It can affect your future financial well-being in a variety of ways, so it’s crucial to weigh out your options carefully with a trusted bankruptcy law attorney. Gilbert P. Kaback, Attorney at Law, will provide you with all the information you need to confidently choose what is right for your unique circumstances. Schedule a consultation today by calling (860) 537-0874, or visit him online to learn more about his bankruptcy law services.