Bankruptcy is an effective solution for many people struggling to overcome insurmountable debt. However, it’s not the right option for everyone. If you are thinking about filing, consult with an experienced bankruptcy attorney who can go over all the pros and cons with you. The legal team at O’Neill Law Firm has helped numerous residents in La Crosse, WI, determine whether or not filing bankruptcy will benefit their particular financial situation. They take the time to explain the process in detail so clients will know exactly what to expect and make the most informed decision. Below, they share some insight into the benefits and drawbacks of declaring bankruptcy. 

The Benefits & Drawbacks of Debt Relief According to a Bankruptcy Attorney

Benefits

The most obvious advantage of bankruptcy is that it provides substantial debt relief. If most of your debt is unsecured, obtaining a discharge through a Chapter 7 bankruptcy will eliminate your responsibility to pay it back. If you don’t qualify for Chapter 7, a Chapter 13 bankruptcy will give you the opportunity to reorganize your debts into an affordable payment plan that lasts three to five years. Plus, once you retain the services of a bankruptcy attorney and submit your paperwork, you will be granted an automatic stay. This action prevents creditors from harassing you or attempting to recover what you owe through wage garnishments, repossessions, or lawsuits. 

Drawbacks 

One of the biggest disadvantages of filing bankruptcy is the potential loss of property. Chapter 7 bankruptcy requires any non-exempt property a debtor owns to be sold by a court-appointed trustee and used to pay creditors. Fortunately, most states have an extensive list of exemptions, and if you’re at risk of losing assets, you may be able to file for Chapter 13 instead.

Another drawback is that bankruptcy will negatively impact your credit for a while, making it difficult to gain approval for loans, housing, and new lines of credit. On the other hand, there’s a good chance your credit is already suffering from mounting debt, and bankruptcy will grant you a clean slate to rebuild from.

Filing bankruptcy is not to be taken lightly. Although the positives often outweigh the negatives, you will need to take a number of factors into consideration before determining what’s right for you. Should you decide to move forward, the bankruptcy attorneys at O’Neill Law Firm will provide the guidance you need to achieve financial freedom. Contact them at (608) 519-3551, or visit their website for more information.